According to a joint report (2016) published by Experian, PKJ Littlejohn and the University of Portsmouth fraud in the UK could be costing as much as £193bn; nearly four times the last government estimate of £50bn (2013). The estimated loss is largely borne by the private sector at £144bn; which as a cost per adult is a considerable £4,000.
So why is there such a significant difference in these figures? The truth is that no official statistics exist in the UK for the overall level of fraud; largely due to the almost limitless ways in which fraud can be committed, ranging from share sale fraud to mortgage fraud; employee fraud against their employer to computer crime and insurance fraud to falsifying expenses.
Added to this, the fact that the face of fraud crime is far less visible mainly due to business transactions being almost 100% virtual with no human checks or controls means the actual financial risks and cost is probably virtually unknown. However, what all fraud professionals allude to is that the fraud risk to SME’s and the private sector could be one of the largest threats faced by organisations today.
Anecdotes surrounding fraud are almost equal to the number of types of fraud. One example that provides a salient reminder of the threat is the data from the annual Office for National Statistics Crime Survey for England and Wales (CSEW) in the 12 months leading up to September 2016. Whilst it was the first CSEW that included a full year’s data on fraud and computer misuse, the figures show that of the 11.8m incidents of crime in the report, an estimated 5.6m were relating to fraud and misuse. Unless we become more aware and vigilant of the risks around us, this figure is destined to increase.
So what can organisations do to prevent and understand the sources of these risks?
The answer very much lies with the fact that all fraud is committed by people. So whilst implausible, the only sure fire way for an organisation to be 100% sure that they will not be affected by fraud is not to have staff, any customers, suppliers or in fact any communicate with any human to do business.
Consequently, every single organisation however small, is at an increasing risk of fraud. The only reasonable way to prevent fraud is to fully understand the risks, implement controls and then more importantly adhere to those controls when they are in place. There has never been such a need for business professionals to understand the scope of fraud risk and the practical steps that can be taken to detect and reduce both the financial and reputational damage.
Becoming accredited by the ACFE is a wise step to help many legal and accountancy professionals to get ahead in this growing arena of intelligence. In the past two years, here in the UK, ACFE have accredited around 100 delegates from large organisations in the media; online retail and manufacturing as well as independent and small enterprises. The programme provides a comprehensive understanding of the extent of fraud, covering these 4 key areas;
Law Related to Fraud
Financial Transactions and Fraud Schemes
Fraud Prevention and Deterrence
You will receive direct tuition and the opportunity to network with like-minded individuals. This informative course provides much needed know-how to ensure we have the levels of intelligence needed to keep all of us safe from this often invisible crime and enable businesses to remain vigilant.