Fraud survey – clear as mud ?

evolvedlegal
November 18, 2012

A recent publication from the Home Office is certainly detailed and throws up some interesting facts, but on the whole, for a 90 page survey, the findings are very confusing. The report adopts a sectoral approach, not necessarily by reference to just business types, but with a starting point of attitudes and experience of fraud. The sectors range from those businesses which don’t worry about fraud, to those that do and have some experience of it, and to those that worry a lot about it and take a proactive action to reduce it or uncover it.

Strangely, the survey found that fraud is in fact worse in the companies that have experience of it and seek to do something about it. that certainly appears odd !

Perhaps this fact is not quite so odd when taking into account that the companies that have suffered a lot from fraud, and consequently take it seriously, tend to be in the bigger end of the SME sector, those companies that have a turnover of over £20 million. The survey shows that the risk of serious fraud rises significantly for a business when it’s turnover reaches that size.

With fraud becoming ever more sophisticated, it may also come as a surprise that the biggest threat is not, as would perhaps be thought, from internal or employee fraud. It comes from external hacking. Across all sectors, in terms of business types, sizes and locations, the overall loss of turnover averages at between 1-2%. This is not to say it should be taken lightly, many frauds can be far more serious and devastate a business.

So, what does all of this mean ?

The data suggests that the biggest risk factor is size of business and that fraudsters are targeting a particular size of business more. It also suggests that taking certain actions to prevent fraud may not be enough, and that the fight is becoming more complex and costly. More is needed, and that simply bringing in external help may be insufficient. Internal communication and education are also big factors and that companies of a certain size will need to continually review what they are doing to combat fraud, as they are dealing with a fast moving and ever changing threat.