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Third Party Fraud – Breaking down Trust

August 4th, 2009 · 1 Comment

As the economies around the world remain challenged by the economic environment, the propensity for fraud is significantly higher.  One may speculate that fraud is consistent but only our sensitivity shifts between good and bad times.  Whichever school of thought you support is a matter of risk perspective, and quite irrelevant today.

Fraud is up on a worldwide basis.  The attacks and scams are increasing, and it is occurring across all sectors.  An excellent breakdown the “KPMG Forensic Fraud Barometer” states that fraud for the UK and areas that over 1.1 billion Pounds of fraud have come to court in 2008.

The Association of Certified Fraud Examiners (ACFE) has a great amount of detailed statistics here, a nice simple guide for small businesses seeking to minimize/prevent fraud, and a nice bit of information on the past ACFE fraud conference (highly recommended)

We are definitely seeing these frauds perpetrated in common channels – such as in Las Vegas at Conferences (below are several links to articles referring to two ATMs found during the DefCon 17 Conference – very interesting read):

In addition organized crime groups are also leveraging the technologies of today (Facebook, twitter, SMS) – and the attack vectors (i.e., phishing).

Protection; Prevention; Detection:

  1. Being aware of trends is vital to erecting current and appropriate (even if temporary) safeguards – such as required by the FTC Red Flag
  2. Communicate with peers and collaborate – that may be accomplished by being a part of message boards; Twitter Groups, and attending Conferences.
  3. Evaluate your fraud programs and determine the current success rate, and implement corrections.

These are simply single high level areas to consider – review your fraud programs seriously and consider the resources available by the above referenced parties.

As mentioned by Vivien Osborne of KPMG UK in the KPMG Forensic Fraud Report:

“In these harsh economic times, internal fraud could become the tipping point between the survival and demise of an organisation.  Companies need to be rigorous about re-enforcing their anti-fraud measures.  By reviewing their high risk and key operations, having effective reporting channels and deploying detection mechanisms such as data analytics they may give themselves a better chance to fight fraud.”

Additional Fraud Resources, please add below in comments.

Best,

James DeLuccia IV

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1 response so far ↓

  • 1 Scott Patterson // Aug 20, 2009 at 9:14 am

    Thank you for finding and referencing the ACFE’s information in your blog article. We hope it is helpful to your readers. Fraud is a major problem and its impact could mean the difference of survival for an organisation during this difficult economy. Best regards.

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