Corporate fraud on the rise, reveals Kroll report
22 October 2013
European firms are reporting a significant rise in numbers of fraud incidents in the past year, according to the Kroll Global Fraud Report.
Tue, 22 Oct 2013European firms are reporting a significant rise in numbers of fraud incidents in the past year, according to the Kroll Global Fraud Report.
Risk mitigation and response experts Kroll found 71% of companies in Europe were affected by fraud in the past 12 months, slightly above the global average of 70% and significantly up from 63% the previous year.
One of the sharpest increases was in vendor, supplier or procurement fraud, which affected 17% of businesses, up from 9% last year. In fact, of those companies in Europe that fell victim to fraud in the past 12 months, more than one in four (28%) experienced fraud perpetrated by vendors or suppliers, while 9% suffered at the hands of joint venture partners.
Kroll believes the globalisation of business is increasing exposure to fraud, as organisations seek to expand into riskier markets overseas and use greater levels of outsourcing.
Information theft remains the second most common type of fraud, affecting one in four European businesses over the past year (25%) and executives say that the complexity of their IT infrastructure is the biggest factor increasing their company’s exposure to fraud (cited by 37% of respondents).
This increasing exposure to fraud due to IT complexity is being exploited more by outsiders rather than an insider job. As a share of all incidents of information theft, attacks by external hackers more than doubled from 14% to 33%, and 17% of information theft victims suffered as a result of a hacker attack on a vendor or supplier, up from 3% last year.
Elsewhere, defence secretary Philip Hammond, speaking on BBC’s Newsnight, said he would consider recruiting convicted computer hackers to join the Joint Cyber Reserve Unit to tackle cyber threats.
However, each case would be reviewed on its merits, as long as offenders passed the security vetting.
Risk mitigation and response experts Kroll found 71% of companies in Europe were affected by fraud in the past 12 months, slightly above the global average of 70% and significantly up from 63% the previous year.
One of the sharpest increases was in vendor, supplier or procurement fraud, which affected 17% of businesses, up from 9% last year. In fact, of those companies in Europe that fell victim to fraud in the past 12 months, more than one in four (28%) experienced fraud perpetrated by vendors or suppliers, while 9% suffered at the hands of joint venture partners.
Kroll believes the globalisation of business is increasing exposure to fraud, as organisations seek to expand into riskier markets overseas and use greater levels of outsourcing.
Information theft remains the second most common type of fraud, affecting one in four European businesses over the past year (25%) and executives say that the complexity of their IT infrastructure is the biggest factor increasing their company’s exposure to fraud (cited by 37% of respondents).
This increasing exposure to fraud due to IT complexity is being exploited more by outsiders rather than an insider job. As a share of all incidents of information theft, attacks by external hackers more than doubled from 14% to 33%, and 17% of information theft victims suffered as a result of a hacker attack on a vendor or supplier, up from 3% last year.
Elsewhere, defence secretary Philip Hammond, speaking on BBC’s Newsnight, said he would consider recruiting convicted computer hackers to join the Joint Cyber Reserve Unit to tackle cyber threats.
However, each case would be reviewed on its merits, as long as offenders passed the security vetting.
