The fraudsters are pulling ahead in the eternal battle between businesses and the bad guys, especially in the U.K.
To that end, Vocalink, a Mastercard company, released its third annual Business Fraud Report, which found that as much as 73 percent of the U.K. businesses it surveyed think the payment fraudsters are “ahead of the industry.” Additionally, 22 percent of respondents said someone has attempted to commit payments fraud against their businesses. A full 37 percent said they have either been a victim of payments fraud or know a firm that has been.
As reported last year, £1.2 billion (nearly $1.572 million USD) was lost through fraud, per statistics from UK Finance. The Vocalink data showed that, of the companies that were victimized, one in 10 thought about closing up shop.
Though the impact of these fraud efforts have been far-reaching, internal processes leave much to be desired. The study found that only 32 percent of U.K. firms have put tighter standards in place to deal with payments fraud, and as much as 17 percent said they do not have any processes in place at all.
The Vocalink findings come against a broader backdrop, where the International Monetary Fund (IMF) has estimated that stanching corruption would mean that $1 trillion in annual tax revenues could be garnered across the globe.
“Less corruption means lower revenue leakage and less waste in expenditures, and higher quality of public education and infrastructure,” the report found.
In terms of other reports, SAS found that procurement fraud is rampant in the U.K., and these firms lag behind those in other countries that have comparably better systems in place to detect and combat fraudsters. In some cases, employees and suppliers collude to defraud firms during the procurement bidding processes. The survey found that 24 percent of businesses have been victims of such collusion, while 31 percent of businesses surveyed were exposed to contract bid rigging and 43 percent to duplicate invoices.
Hertz Hurt By Accounting Scams
Separately, Hertz has demanded a clawback of as much as $70 million from a number of former senior executives in an accounting scandal that took place a half-decade ago.
In a scheme that used accounting fraud to inflate earnings, where investigations and restatements cost the company $200 million, Hertz filed the suit late last month after former CEO Mark Frissora, former CFO Elyse Douglas and former General Counsel J. Jeffrey Zimmerman refused to return compensation that had been tied to those inflated financial results. As reported by Accounting Today, Hertz’s corporate policy allows the company to seek clawback compensation where employee misconduct or negligence has led to a restatement.
Separately, in Washington state, KEPR News reported on a business scam that targets small businesses in the state. The scam is one where fraudsters trick credit card readers to approve transactions for cards that have not been linked to accounts — or that have been linked to accounts with no money.
The in-person purchases are done at the terminal, with fraudsters posing as customers and saying they must enter a card PIN, which helps them bypass the chip reader. The transaction is completed and, thus, the small business becomes liable for the card transaction.