Norwich
Union estimates fraud cost the UK £16bn
in 2004. KPMG’s annual Fraud Barometer
shows that the two biggest classes of perpetrators
of fraud were managers and organized crime,
which together accounted for almost 90% of UK
fraud cases, namely £14.4bn in losses.
A significant proportion of bank-related fraud
is committed by, or with, the collusion of internal
employees. There are even cases of fraudsters
being inadvertently re-employed in the industry.
Fraudulent activity may be initiated by staff.
Some estimates suggest that over 80 per cent
of computer-based frauds involve employees.
The
FSA reports that there had been a number of
cases in which individuals working for financial
services firms were coerced into providing information
for outsiders who have then used the information
to commit fraud.
Two
levels of insider fraud:
a. Paper- based data or information stolen
b. Electronic access to customer data stored
on computer system, e.g. database hacking or
theft.
Early warning signs of suspicuous “insider”
behaviour (from CIFAS):
a
Staff showing stress and personality changes
without having an especially high workload
b.
Staff who always work late and are reluctant
to take leave
c.
Evidence of staff living beyond their apparent
means or having wealth not in keeping with their
salary level; or staff undergoing a sudden change
of lifestyle
d.
New staff resigning quickly ? Staff with keen
external business interests
Other
early signs in the System:
a. Customer complaints of missing statements,
unrecognised transactions
b. Suppliers / contractors who insist on dealing
with just one individual or staff who have “cosy”
relationships with suppliers/contractors
c. Rising costs with no explanation
d. Key employees acting without accountability
or supervision and not being subject to audit
checks |
