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21 December 2012 | Anna Reynolds
Procurement and supply chain fraud will increase in 2013 as the poor economy continues to put people under pressure, according to consultancy UK Fraud.
With more high quality data becoming available to fraudsters than ever before and cuts to the UK’s benefits spend, overall fraud levels are forecast to rise significantly across the UK and Europe, with card fraud seeing the biggest growth.
Bill Trueman, CEO of UK Fraud told SM: “The current economic climate is putting recruitment under pressure and people feel unstable in their jobs. This can cause internal procurement staff and supplier organisations to favour people, take back-handers and cut corners.”
He added the lack of new hires by firms would also contribute to the increase. “Normally there is a fall in fraud when new people come in because they don’t know the old tricks. Tax rises can also contribute to people resorting to fraud.”
Banks and credit card companies, insurers, retailers and local authorities are likely to be the most affected by fraud in 2013. UK Fraud said the lack of central direction and strategy from government to tackle fraud could also lead to an increase. Currently the UK government’s response is divided between the Cyber Crimes Unit, the Cabinet Offices’ Fraud Error and Debt Initiative and the National Fraud Authority.
However UK Fraud is hopeful as the Department for Work and Pensions is currently tendering to get improved fraud strategy skills and civil servants working in the NFA are beginning to gain real experience of the sector.
The consultancy added fraud solutions are becoming more advanced, with better screening, scoring and risk based monitoring, replacing older systems.
Paul Guile, CIPS global procurement fraud advisor, added: "We may see more cases of supply chain fraud being reported. Whether this is because procurement fraud is occurring more, or because people are becoming more aware of what to look out for remains to be seen. Often cases are historical procurement fraud that have been identified going back many years.
"With the Bribery Act now fully in force and organisations more aware of the risks around bribery and corruption, organisations are becoming more active. As company overheads and margins become squeezed, many organisations are now proactive in seeing procurement fraud as a risk."