Treasury News Network

Learn & Share the latest News & Analysis in Corporate Treasury

  1. Home
  2. Fraud Prevention
  3. Minimizing Fraud Procedures

Global fraud levels on increase and still migrating to softer points. Shows need for constant attent

Fraudsters are innovative, persistent and always focus their attention on the easiest point. This is shown by a round of statistics on the sources and volumes of fraud:

  • online banking and payment card fraud in the UK showed a sharp decline in 2011, which is attributed to the growing awareness of data security issues and the banks better security systems, but at the same time there was a corresponding sharp increase in cheque and phone banking fraud. Already PwC is warning that two-factor authentication in online banking is not the silver bullet
  • 62% of British mid-sized and large companies that handle customer-not-present (CNP ) payments lost money through fraudulent CNP transactions in the 12 months up to March 2011
  • despite new initiatives in fraud prevention, in UK 88 per cent of large retailers lost money from customer-not-present (CNP) fraud in 2011. Even worse, 46 per cent of these companies saw levels of fraud actually increase
  • reported fraud in the UK exploded over the last five years and broke the £7bn barrier according to the BDO LLP's annual FraudTrack report. AND the BDO's specialist fraud investigators warn that this is just a precursor of worse things to come and warns that annual reported corporate fraud will continue to rise significantly over coming years. Areas fuelling this warning includes fraud expected across commercial lending and mortgage markets. Concerns were expressed that 'whistle-blowers' were increasingly afraid to come forward
  • CIFAS, the UK's not-for-profit membership association representing the private and public sectors, reported that there were more non-payment card frauds reported by its members than ever before.

The lessons from these frauds and many other examples are quite clear: have proportionate and practical procedures to prevent fraud; top level commitment and involvement are essential, including a clear policy of rewarding 'whistle-blowers'; constant due diligence and fraud prevention built into all procedures. In the excellent Chase Paymentech paper 'Fraud Prevention That Powers Growth' they recommend 'work smarter, not harder to fight online fraud'. This applies to all types of fraud.

Like this item? Get our Weekly Update newsletter. Subscribe today

Add a comment

New comment submissions are moderated.