Commercial crime is a massive global problem and one that can often remain undiscovered for years. Statistics are hard to come by, especially as it is often a loss that companies do not wish to be publicized.
According to the Association of Certified Fraud Examiners, the figures are extraordinary: survey participants from 106 countries estimated that the typical organization loses 5% of its annual revenue to fraud*. Applied to the estimated 2009 Gross World Product, this figure translates to a potential global fraud loss of more than USD 2.9 trillion. Nearly a quarter of the frauds involved losses of at least USD 1 million.
Ways to spot crime within your business
Commercial Crime takes many different forms. It may arise internally through employee fraud or theft, or externally with criminal gangs and cyber thieves. Past experience shows that there is an increase in criminal activity during an economic downturn, and companies should be extra vigilant about the possibility of employee fraud, especially where redundancies, cost savings, and salary freezes are being implemented.
There are some classic risk indicators that companies should be aware of, though clearly caution should be exercised before considering whether fraud is taking place:
• Employees over-stressed, working late, reluctant to take holidays. • Employees with unexplained wealth or living beyond apparent means. • Increase in customer or supplier complaints. • Subsidiary results ‘too good to be true’. • Close...