Resourceful Finance Pro

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Fraud and COVID: New exposures, more roadblocks

Which Scams Are Spiking Now According To Your Peers
Jennifer Azara
by Jennifer Azara

Looks like fraud and COVID go hand in hand! The still-raging coronavirus pandemic is inflicting a spike in financial scams on businesses everywhere.

A staggering nine in 10 of your peers have witnessed an overall increase in fraud at the end of last year. And 44% add it’s a “significant” increase.

So finds the Association of Certified Fraud Examiners’ (ACFE’s) new Fraud in the Wake of COVID-19: Benchmarking Report.

Of course you and your team always have your guard up. But you’re facing some unique challenges right now.

More than three-quarters (77%) say it’s tougher to prevent fraud, while 71% report greater challenges in detecting it and 77% struggle to investigate it.

So what types of scams pose the biggest threat today? See what the ACFE found so you can work within the current conditions to prevent a costly hit to your organization.

4 biggest fraud threats now

The ACFE surveyed businesses on 12 specific fraud types to capture their experiences with financial funny business. These four fraud types are experiencing the biggest surge at this point in the pandemic:

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  1. cyberfraud (business email compromise, hacking, malware and ransomware) with 85% seeing an increase in these scams
  2. identity theft (73%)
  3. payment fraud, such as credit card fraud and fraudulent mobile payments (72%), and
  4. unemployment fraud (69%).

Worse still, greater numbers of folks expect to see even more incidents of these specific fraud types in the coming months.

Admittedly you and your team face an uphill battle. What’s getting in the way now that wasn’t during pre-pandemic times?

The top four roadblocks:

  • the inability to travel
  • challenges in conducting remote interviews to investigate
  • a lack of access to evidence, and
  • canceled or postponed engagements or investigations.

Considering this, you may have to get a little more creative in your approaches given that many folks are still remote, travel remains limited, etc.

Your best defenses

With no foreseeable end to the pandemic and the working conditions they cause, companies are devoting more effort and dollars to specific protections.

To see how your plans align with your peers’ courses of action check out what others say they’ll do to fight fraud in this new normal:

  • 48%: anti-fraud technology
  • 41%: a bigger overall budget for anti-fraud programs
  • 38%: fraud-related consultants or other external resources
  • 37%: more budget for anti-fraud training and professional development, and
  • 33%: a higher level of anti-fraud staffing.

Whichever of these – or combination of them – you have planned within your own company, make sure you secure commitment up and down the organization.

Jennifer Azara
Jennifer Azara
Jennifer has covered business and finance for more than 24 years. She has written for CFOs, credit and collections professionals and accounts payable practitioners and has spoken at industry conferences on sales and use tax compliance.