Fraud Surging During Pandemic Era

Chris Gaetano
Published Date:
Sep 14, 2020
A recent report from the Association of Certified Fraud Examiners says that fraud of all sorts has seen major increases over the past few months, and levels are expected to get even higher in the future. The findings are based on a poll of 2,096 ACFE members in late July.

Overall, 77 percent of respondents have seen an uptick in fraud, and 92 percent expect fraud incidents to increase over the next 12 months. Of those who observed higher levels of fraud, 34 percent said it was a significant increase while 43 percent said it was a slight one.

Cyberfraud saw the biggest uptick, with an overall 83 percent increase since August, of which 47 percent was seen as significant. Next was unemployment fraud, with a 73 percent increase (41 percent significantly) and payment fraud, at 68 percent (31 percent significantly). While these three represent the biggest growth areas, fraud of all sorts is seeing major increases. Identitfy theft, for instance, has seen a 67 percent increase (29 percent significantly), financial statement fraud has increased by 41 percent (12 percent significantly), and bribery and corruption has grown by 49 percent (23 percent significantly).

The report said that companies are aware of this rise in mischief, and many are allocating resources in response: Overall budgets for anti-fraud programs are expected to either increase, said 38 percent of respondents, or remain the same, said 48 percent. Only 14 percent said that their budgets were actually going to fall. Anti-fraud staff will travel less, though, with 42 percent anticipating a decrease in this area, but they will use technology more, as 44 percent say their organizations are likely to increase budgets for anti-fraud technology. One third said they also expect to make more use of anti-fraud consultants.

"COVID-19 has affected—and will continue to affect—the business environment in countless ways," said the ACFE. "Travel bans, employees working remotely, and an increased reliance on technology and economic uncertainty have become the reality for many organizations around the world. And while these and other hurdles present numerous logistical and operational challenges, they also open the door to the increased pressure, opportunity and rationalization that can lead to fraud."

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