The Impact of Fraud | Print |  Email
Fraud MoneyFraud continues to increase and shows no signs of slowing down.  According to the KPMG Fraud Barometer, over £1bn of fraud came to court in 2007. This is the highest since 1995 .

There are now fears that the credit crunch will lead to personal and corporate pressures fuelling fraudulent behaviour, making 2008 even worse.  KPMG, which has been running a fraud barometer since 1987, has suggested that large, high value frauds such as Polly Peck, Maxwell and BCCI emerged as a result of the recession in the early nineties.  The implication of their research is that we should expect more of the same.



What are the fraudster's targets

  • Information and systems
  • Property
  • Reputation
  • Potential
  • People

What are the threats to your Company?

  • Financial Fraud
  • Organised crime
  • Industrial espionage
  • Computer crime

What are the threats to your systems?

  • Human error or ignorance
  • Fraud and theft
  • Social engineering (ie using deception to breach security through e-mail, telephone or face-to-face communication).
  • Identity theft
  • Industrial espionage

Why are organisations vulnerable to the damage that can be caused by fraud?

The attention of the regulators
An increasingly competitive and hostile marketplace
A high profile and attractive target
A large organisation (geographically spread?)
Significant change throughout the organisation
Reliance on information technology
Move from mainframe technology to distributed client-server applications architecture
Increase in the use of e-commerce and the Internet
Globalisation of the economy means doing business with strangers
Attitudinal change and a general decline in respect for the law
Corporate restructuring has affected job security and loyalty to the organisation
Corporate restructuring has “delayered” management, eliminating controls and reducing supervision
Targeting of business by organised criminal networks
The low risk of detection and reluctance to report
The lack of punishment
What are the impacts?

Direct
  • Financial loss (revenue and capital)
  • Damage to the credit rating
  • Breach of regulation or law

Indirect
  • Damage to reputation
  • Loss of customer confidence
  • Loss of shareholder confidence
  • Loss of management control

How can organisations protect themselves from the damages of fraud and create a culture that is vigilant towards all aspects of security?
 
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