Fraud on the increase in New Zealand

White collar crime, including cyber crime is affecting more businesses in this country.

Yet we are probably not taking the threat seriously.

Almost half of the 93 companies responding to the 2011 PwC global economic crime survey say they have been the victims of fraud in the past year.

The findings have seen New Zealand leap up global rankings for reported fraud; from eighth place in 2009 (out of 54 countries) to fourth place in 2011 (out of 78 countries)

There’s now more reported fraud in New Zealand than Australia and the US and this country is above the global average for reported fraud among almost 4000 survey respondents internationally.

The top three sectors affected by fraud were retail and consumer (80%), energy and mining (71%) and government (60%).

PwC forensic services partner Eric Lucas says it seems the pressures and incentives to commit fraud had increased since the 2009 survey.

Cybercrime now the third largest culprit

Cybercrime was included in the survey for the first time and is now New Zealand’s third most reported type of economic crime.

“The survey shows cybercrime is taking off. Criminals are becoming more sophisticated in their approach as they have identified how organisations have a reliance on technology and the fraudsters are acquiring the technical skills to take advantage of low risk and high rewards,” says Mr Lucas.

Yet businesses are not taking the threat of cybercrime seriously with just less than 40% of respondents saying they had not had any cyber security training in the last year.

In other findings:

Asset misappropriation topped the list again as the most prevalent form of economic crime in New Zealand at 74%.

Of New Zealand businesses that lost money to fraud, 65% lost less than $135,000 but two businesses lost more than $6.7 million.

The survey found of the 39% of detected frauds that came from tip-offs, only 2% of those were reported through formal business channels, such as a whistleblower hotline.

“Businesses need to ask themselves, what happens when the person suspected of committing fraud is also the person responsible for detecting it? And when a fraud is detected, why did just 21% of NZ organisations give the fraudster nothing more than a formal wrap over the knuckles,” said Mr Lucas.