Fraud: Don’t let them in

Adam Bernstein considers how fraud can affect businesses, and warns that the public transport sector is not immune

Hardly a day goes by without a warning or headline about scams. Employee frauds, push payment, or errant suppliers short-changing customers – the level of activity is rising, despite the actions of authorities to stamp out the problem. A lot of focus recently has been on fraudulent activity committed against individuals. In its November 2022 report ‘Fighting Fraud: Breaking the Chain,’ the House of Lords Fraud Act 2006 and Digital Fraud Committee said that in the previous 13-month period, 89% of fraud victims were individuals rather than organisations or businesses.

But having said that, Andrew Northage, a partner in the regulatory and compliance team at Walker Morris still considers fraud to be a significant threat in corporate environments. He cites the UK findings of PwC’s ‘Global Economic Crime Survey 2022’ which “showed that 64% of businesses had experienced fraud, corruption or other economic/financial crime in the previous two years, up quite significantly from 56% in 2020.”

David Kearns, Managing Director of Expert Investigations, considers fraud to be prevalent in all business sectors: “In 23 years of investigating employee dishonesty [it’s affected] all sectors, including manufacturing, services sector, professional services, utilities, transport and logistics, and healthcare.”

He adds that, according to the Association of Certified Fraud Examiners (ACFE) ‘Report to Nation 2022,’ a worldwide report based on asset misappropriation fraud, “we do not know how prevalent fraud is as so much is undiscovered, unreported and so not investigated.”