Fraud `costs UK firms £10bn a year'
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.BY MARY FAGAN
Industrial Reporter
More than 40 per cent of companies fail to check staff activity regularly and almost half do not train staff in awareness of fraud, according to a survey by PA Consulting on computer-related fraud.
The survey shows that fraud is costing British organisations up to £10bn a year - half through mis-use of computer systems and often perpetrated through collusion between an employee and others inside and outside the company.
Peter Jenner, a director of PA, said the fraud amounted to "a parasitic industry with an income of £40m per day in the UK".
The important problem was with management's lack of control rather than with the computers themselves, he said.
Few seemed to realise that there were computer systems available that tracked patterns of behaviour within various parts of an organisation and flagged up anything that might expose the company to risk.
Mr Jenner added: "We know too little about the Baring Brothers' problem to comment, but if they had had this kind of information six months ago they could have implemented things to stop it happening.
"It is clear from our survey that management control is the real problem - much more than any technical security problems with computers. Management control is lousy," he said. The report shows that almost two-thirds of fraud cases are discovered by chance rather through formal detection processes and that more than half the companies surveyed have never assessed their exposure to fraud.
This is in spite of 80 per cent saying that it is now a serious problem and that it will get worse.
Already losses due to known fraud average £5.2m each year among the companies in the survey. Mr Jenner said that would-be fraudsters were having to collude with others to succeed as business processes and the computer systems used became more complex.
There was growing concern that collusion with people outside a company was based on organised crime and that people were increasingly being "planted" inside target firms.
PA also warns that companies must detect fraud within a week at the outside if they were to have any chance of recovering the money.
However, the survey shows that it normally takes six months to uncover any problem - long after the assets and the fraudsters have disapppeared.
The report shows that fraud is rarely the result of computer hackers but instead due to exploitation of weaknesses in everyday transactions.
"The difference is that computers have vastly speeded up the way fraud occurs and changed the method fraudsters use," it says.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments