Fraud and cybercrimes exploding during COVID-19
As the country lurches through the pandemic and the attempts at reopening the economy, businesses are facing another significant threat from fraud.
To explore how COVID-19 is impacting risks and threats, the Association of Certified Fraud Examiners (ACFE) is conducting a series of surveys. The first, which surveyed more than 77,000 anti-fraud professionals from late April to mid-May, was released this month.
Organizations need to brace themselves for the explosion of fraud to only get worse. The increased pressure on companies and employees can open new doors to temptation for internal fraud or distract teams so external threats get by their defenses.
Here are four key takeaways:
1. Fraud is increasing
Sixty-eight percent of respondents have seen an increase in fraud, and 25% say that increase has been significant. And they don’t see any signs of it stopping; 93% are expecting it to continue to increase through May 2021.
2. Cyber fraud is the biggest threat
The threat that has risen the most is cyber fraud; 81% report seeing increases in email schemes, ransomware and malware. The other top nine areas the experts expect to see increases in fraud, ranked from highest to lowest, are:
- Fraud by vendors and sellers
- Payment fraud
- Healthcare fraud
- Identity theft
- Insurance fraud
- Loan and bank fraud
- Bribery and corruption
- Employee embezzlement
- Financial statement fraud
3. Increased costs to defend
Half of the respondents expect to see their anti-fraud budgets increase over the next 12 months. In contrast, 62% did not expect to see increases in staffing to fight fraud.
4. COVID-19 impact
The majority say the coronavirus has made it harder to prevent, detect and investigate fraud because of travel limitations, postponement of engagements and a lack of access to evidence. The anti-fraud professionals also cited three challenges associated with remote workforces: interview challenges, change in control and lack of oversight.
How Wipfli can help
Organizations struggling with cashflow sometimes make cuts in their security and fraud teams. Wipfli can put experienced investigators and state-of-the-art technology to work against fraud and cyber threats. From fraud and financial investigations to testing your defenses, our teams can work with you in the face of increasing threats. To learn more, see our web pages on forensic services and cybersecurity.
Or learn more from these resources:
- Healthy online payment practices
- Managing risks from vendor dependencies in a crisis
- Preventing fraud in a remote work world
- Fighting the wave of coronavirus phishing scams