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.
Scott Godes, Partner in Barnes & Thornburg's Insurance Recovery Practice, advises clients on cyber risks and insurance matters and successfully litigated two of the first cyber insurance coverage cases in the country.
Georg Hansbauer is co-founder and CEO of Testbirds, a world-leading crowdtesting provider. He is responsible for the further development of the company's services and IT infrastructure as well as sales and marketing. Georg has extensive experience in the field of enterprise testing - from automated testing of complete IT service desks to load testing - and has managed numerous IT projects for international corporations. He graduated from the elite program "Finance and Information Management" at the University of Augsburg and the Technical University of Munich and holds a Master of Science with distinction (M.Sc Hons).
Doug Parsonage is the VP of Business Development & Data Licensing at Data Axle. Doug is skilled in customizing solutions to best fit the needs of his clients, developing and managing client relationships, and growing key strategic partnerships. His passion is helping clients in the local search, navigation, local listings management, insurtech/fintech, and direct marketing industries.
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.
