Fraud is wrongful deception for financial gain. The global levels of fraud are huge and growing:
- according to the Association of Certified Fraud Examiners (AFCE) in the USA, a typical business loses 5 per cent of its revenue to occupational fraud and abuses every year, representing $3.7 trillion globally if applied to 2013 estimated Gross World Product
- the UK's National Fraud Authority (the National Crime Agency as of March 2014) estimated that fraud cost the UK economy over £73bn in 2012, £45.5bn of that in the private sector
- cybercrime cost UK enterprises £6.3bn/year (Ponemon institute, 2015)
- retailing payment card fraud, which, at around 0.06% of sales, is insignificant compared to 'shrinkage'/shoplifting in stores, which represent over 1% of sales. In the UK retail crime cost retailers £4.6bn in 2012-13
- £9 million loss at a UK corporate treasury department where new payment authorisers were set up without knowledge of the rest of the department
- more than 85% of fraudsters had never been previously charged or convicted for a fraud-related offense (AFCE 2010 Report to the Nations)
- according to KPMG's 2015 Fraud Barometer, the value of fraud in the UK rose by 22% in the first half of this year to £385m (based on UK fraud court cases related to a loss of £100,000 or more).
No wonder the United Nations Convention against Corruption has been signed by almost all the UN member countries.
Prevention of fraud is a way of life. Good habits and practices combined with basic procedures, and systems are needed in the corporate treasury department. It is also vital to identify correctly that a person - and a company - is who say they are by using the latest ID systems and services.
Today money laundering is a huge problem and is growing. The review of the nature of money laundering and the latest prevention techniques show how money laundering can be minimized. There is fraud in all payment systems, so it is essential to keep on top of each type of payment systems fraud using the latest techniques, technologies and systems.
Prevention is better than cure, but once a type of fraud is stopped another begins. Eliminating fraud completely is an impossible dream, but it can be minimised.