KPMG’s latest six-monthly Fraud Barometer shows a large rise in the value of fraud being committed in Australia.
For the period April 2016 to September 2016, the total value of frauds rose by 16 percent to a total of $442m, from $381m in the previous six month period – although average value per fraud fell slightly, from $3.3m to $3.1m.*
Frauds perpetrated by professional criminals notably rose by 300 percent - although the majority of frauds are still carried out by company insiders – with technology playing an increasing role.
Gary Gill, Head of Forensic at KPMG Australia, said: “Our Barometer shows that fraud continues to rise relentlessly in Australia. A notable finding this time is an eight-fold increase in frauds targeted at financial institutions. This is an issue that firms in that sector need to take seriously.”
“Both public and private organisations openly acknowledge that cyber-attacks are one of the most prevalent and high-impact risks they face, and yet many operate on the basis ‘it won’t happen to me’. Organisations must keep abreast of the cyber threats, both physical and digital, to ensure the protection mechanisms don’t become obsolete given the pace of technology and business change. You can have a variety of IT protections in place to defend yourself, but it’s all for nothing if you are tricked into giving away the keys to the electronic vault.”
Gary Gill said: “Our UK colleagues have just issued their own fraud barometer, which showed that fraud there had risen by 55 percent with a large rise in cyber-crime - so it is an international problem. Businesses in Australia and overseas need to guard themselves against the perennial threat of the ‘inside job’ and the rapidly increasing danger of cyber-attack from outside and within.
“Consumers are also affected - through the rapid rise of technology and online platforms, more people than ever are being targeted by fraudsters who have unrestricted access to a larger pool of victims. However, we are also seeing the internet being used by consumers who are being tempted to obtain goods and services that they perhaps should have a fair idea are not legitimate. Consumers may often turn a blind eye, or consider this a victimless crime, but there are cases both at home and overseas which show individual victims who ended up paying a high price.”
KPMG also urges companies to recognise the important role of whistle-blowers.
Gary Gill said: ”A number of frauds in the research were uncovered by whistle-blowers, who noticed suspicious behaviour and appropriately raised these concerns so they can be actioned. This is often the way that fraudsters are caught and held accountable for their actions.
“No matter what systems and controls are put in place, the best defence is often an employee noticing something amiss. It is important that they have a safe and confidential mechanism to report suspected fraud. Many organisations are now using such a service.”
* The KPMG Fraud Barometer monitors the incidence of fraud cases in the Australian courts, with a value in excess of $50,000. It examines trends and characteristics, with a focus on perptrators, victims and the nature of the frauds.
Senior Communications Manager, KPMG
T: 02 9335 7765 / 0400 818 891