Fraud is continuing to increase this year, in part due to the COVID-19 pandemic, according to a new survey by the Association of Certified Fraud Examiners.
The report found that 79 percent of anti-fraud professionals have seen an increase in the overall level of fraud as of November, compared to 77 percent in August and 68 percent in May. Thirty-eight percent of the respondents said in November the increase has been significant, compared to 34 percent in August and 25 percent in May.
Yuval Teller-Hason is Director of Business Operations at Ledge, a finance operations platform that automates high-volume reconciliation with AI. Prior to joining Ledge in 2023, he worked for nine years in the Israel Ministry of Finance where he built economic strategy for the banking, capital management, and insurance sectors, led legislation efforts for open banking, and designed initiatives to develop the local payment market, including the creation of a new regulatory framework for payment service providers.
Matt Wood is the global head of finance and accounting outsourcing (FAO) at Personiv, responsible for delivering finance and accounting solutions to clients worldwide. He joined Personiv in 2016, bringing a wealth of experience from organizations including HireBetter, Dell and Princeton Recruiting Group, with a focus in recruiting and operations.
Erich Kron is Security Awareness Advocate for KnowBe4, the world-renowned cybersecurity platform that comprehensively addresses human risk management with over 70,000 customers and more than 60 million users. A 25-year veteran information security professional with experience in the medical, aerospace, manufacturing, and defense fields, he was a security manager for the U.S. Army's 2nd Regional Cyber Center-Western Hemisphere and holds CISSP, CISSP-ISSAP, SACP, and other certifications. Erich has worked with information security professionals around the world to provide tools, training, and educational opportunities to succeed in information security. Contact him through LinkedIn: https://www.linkedin.com/in/erichkron/.
Cyber fraud, payment fraud (such as schemes with debit and credit cards) and identity theft are the three top fraud schemes seeing increases, according to anti-fraud professionals.
The largest increase in observed fraud was in financial statement fraud, with 7 percent more anti-fraud professionals reported seeing financial statement fraud in November, compared to August. That could be because as companies continue to see their profits drop, they feel more pressure to cook the books.
The survey also found 77 percent of anti-fraud professionals report that investigating and preventing fraud is more challenging now, while 71 percent said detecting fraud is more challenging as a result of the pandemic.
ACFE members anticipate the fraud trend will continue, even as vaccines have begun rolling out this week in the U.S. Ninety percent of the survey respondents expect a further increase in the level of fraud over the next 12 months, with 44 percent predicting the change is likely to be significant.
Nearly half (48 percent) of the organizations polled expect to increase their investments in anti-fraud technology, and 38 percent intend to raise the use of fraud-related consultants or other external resources. Budgets for anti-fraud training and professional development are experiencing a similar increase (according to 37 percent of the organizations polled), but nearly one-quarter (24 percent) anticipate a decrease in this area. The budget component most likely to see decreases is travel for anti-fraud staff, which shouldn’t be surprising given the plunging levels of air travel in general over this past year, with 38 percent of the survey respondents expecting a reduction in funds for travel in the year ahead.
