Corporate fraud levels at new high
Channel reinforces research that shows highest corporate fraud level for 20 years
Corporate fraud is at its highest levels for 20 years, according to research that has been reinforced by the channel.
As revealed by CRN last week, KPMG’s annual Fraud Barometer, which tracks fraud cases of more than £100,000 in the UK Crown Court system, claimed that 277 fraud cases came to court in 2006, worth a total of £837m (CRN Online, 30 January). This is compared with 222 cases worth £942m in 2005.
The research also stated that more than 40 per cent of all fraud cases in the second half of the year were carried out by professional criminals, compared with 25 per cent of cases in the first half of the year.
Speaking to CRN, Hitesh Patel, director of fraud services at KPMG, said there were a number reasons for the increase.
“The IT market is pretty much the same as all the other markets when it comes to fraud,” he said. “More and more businesses are outsourcing towards far-flung countries and downscaling their operations in the UK. This starts to erode stop-checks that are in place to prevent internal fraud.
“Also, identity fraud and card-not-present fraud are being exploited by criminals and more firms are falling victim to this type of crime. The key is to reassess your business and plug any gaps that could be open to abuse, both internally and externally.”
Nitin Joshi, founder of advisory service ChannelMoney, said: “The authorities should be given more powers to stamp out fraud. There is a strong argument to start up a fully resourced and funded unit that specialises in channel fraud.
“There is a lot of identity fraud, and a lot of overseas fraud still going on in the channel, with the fraudsters using the UK as a base for their activities.”
Eddie Pacey, director of credit at Bell Micro, said: “The Fraud Barometer reflects what I have seen in the past year. It is spot on with regards to the channel. On the whole, fraud has increased substantially in our sector over the past few years. More and more people in the channel seem to be getting involved.”