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.
Adrienne Penta is the national head of wealth management at SCS Financial.
Previously, she served as principal of private banking and executive director of the Brown Brothers Harriman Center for Women & Wealth. She led the creation of the CW&W, which supports women as they create and manage wealth and seeks to create a dynamic and inclusive environment where women can engage in conversations about wealth, family and values. She also oversaw private banking marketing and sales enablement.
Kerri Mast is a principal with extensive experience advising business owners and families of generational wealth at Brown Brothers Harriman.
She helps clients achieve their goals relating to estate planning, philanthropy, business succession, and tax minimization. As a national leader of the Philanthropic Advisory practice, Kerri works to create an environment where families can engage in conversations about wealth, values, legacy and impact.
Michael Hickman is CEO and CFO of Exactera, where he manages the company's financial planning and strategic direction. Before joining Exactera, Hickman was the CFO at the global performance-marketing marketplace Perform[cb], where he championed the company's financial strategy and helped increase organic profitability markedly. Hickman oversaw multiple acquisitions and was instrumental in selling Perform[cb] to Beringer Capital in April 2021. A CPA with more than 25 years of leadership experience at companies including Deloitte, MetLife, Roper Technologies, and Switch and Data, Hickman has navigated acquisitions, dispositions, debt financing, corporate consolidations, financial planning and analysis, valuations, SEC Reporting, technical accounting, and system implementation and project management. He holds a master's degree from the University of Florida.
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.
