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.
Tim Mattke is CEO of MGIC Investment Corporation and Mortgage Guaranty Insurance Corporation. He also serves as chair of U.S. Mortgage Insurers.
Shareen Minor is chief revenue officer, U.S., at Vitesse, financial infrastructure connecting the global insurance ecosystem. With more than 20 years of experience across carriers, TPA operations and PE-backed insurtechs, she leads Vitesse's commercial growth in the United States, bringing deep knowledge of the operational and financial pressures facing the U.S. insurance market.
Most recently, Shareen served as chief revenue officer at Ontellus, a leading provider of health records retrieval and claims intelligence, where she delivered sustained double-digit revenue growth, expanded enterprise client relationships across carriers and law firms, and helped position the business for a successful private equity exit. Before that, she held senior leadership roles including chief commercial officer at Charles Taylor Adjusting and Technical Services, SVP of Casualty Operations at Engle Martin and Associates, and regional vice president at NatGen Premier, where she helped launch and scale a new business unit from zero to $50 million in revenue in 15 months.
Michael Topol is co-founder and co-CEO of MGT Insurance (MGT), an insurer modernizing commercial P&C insurance for businesses and their agents.
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.
