Three quarters of retail, wholesale and distribution businesses hit by fraud in the past year, with information theft well above average levels according to new global fraud report
The results of an annual fraud study released today found that information theft affected 28% of retail, wholesale and distribution companies, well above the 22% average.
The 2013 Kroll Global Fraud Report also revealed almost half (43%) attributed their greater fraud exposure to IT complexity. And three quarters (75%) of retail, wholesale and distribution businesses admitted being affected by some type of fraud in the last 12 months. The number of companies with physical assets stolen almost doubled to 45% of businesses from 25% in 2011-2012.
Ignoring increased exposure
The vast majority (87%) of retail, wholesale and distribution businesses described their company as being at least ‘moderately vulnerable’ to physical asset theft. However, a worrying number of firms did not seem to be responding appropriately to this type of fraud, as the survey indicates that only 42% of companies expect to invest in new physical security measures, including those who admitted to being highly vulnerable to theft.
The seventh annual study also suggested retail, wholesale and distribution industries might benefit from a more active approach to fraud: 94% of respondents said their company’s exposure to fraud rose in the past year, by far the highest figure for this question among all industries covered by the survey.
Defending against criminals
Tommy Helsby, chairman of Kroll Advisory Solutions in Europe and Asia, commented: “Fraud is on the rise again and while increasing regulatory pressure and compliance activity is probably driving increased fraud awareness and detection, undiscovered and unreported fraud is an infection with the potential to grow into a life-threatening corporate disease.
Helsby urged businesses not to overlook insider threats. “Perpetrators of fraud are often thought of as faceless hackers in a distant land, but our experience shows that to be the exception rather than the rule; the greatest vulnerability is to those who have already got past most of your defences by virtue of being an employee, partner or contractor,” he said.
“It is vital that, as well as investing in technology, businesses mitigate the insider threat by focusing on areas like staff screening and due diligence on partners, clients and vendors.”