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.
Raju Seetharaman is Senior Vice President, IT and Transformation of Legal & General America’s insurance division, which includes operating companies Banner Life Insurance Company and William Penn Life Insurance Company of New York. He is responsible for IT and Transformation strategy, IT operations and change management with the mission to combine business strategy with cutting-edge IT expertise, to deliver efficient, effective solutions that helps Legal & General America achieve a market-leading position. Raju is an Engineering Graduate and lives with his wife Nirmala, in North Potomac, MD.
Randall Shepard, CPA, is a partner at The Bonadio Group. He has been providing professional and personal consulting and auditing services to his clients for over 25 years. As government practice leader, he oversees all of the services provided to government entities throughout the firm.
Wes Erlam is Director of Urban Regeneration at Legal & General Capital, one of the UK’s leading financial services groups and a major global investor, with international businesses in the U.S., Europe, Middle East and Asia, with some $1.8 trillion in assets under management.
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.
