by Maurice Logie on 03.20.2017
At a recent British Franchise Association conference members heard Brian Lord OBE talk very eloquently about the threat that every UK business faces from Cyber Crime in all its various forms. Even a cursory glance at the subject confirms that the statistics bear this out.
PwC’s Global Economic Crime Survey 2016 reports that one in three small businesses were victims of an economic crime in the last 12 months. When the largest businesses are included as a statistical sector, results suggest six out of 10 companies have experienced fraud in the last 12 months.
All companies are vulnerable to the threat of criminal acts which could include:
Cybercrime continues to increase in volume, frequency and sophistication. It used to be recognised as a problem for companies that transact business online; now is an area of vulnerability for any company that uses computers to send e-mails, have a website or use online banking.
Criminal gangs are increasingly using fake e-mail addresses for a fraud involving false invoices and fictitious bank accounts. In essence, the frauds perpetrated old in new ways.
In addition, there is still the “enemy from within”. Traditionally, significant losses can stem from employees, managers, purchasing departments, and finance teams. A dripping loss committed by a seemingly loyal and reliable member of staff can run for years without being detected. In some cases, this could cost the company several million pounds.
These losses also cause untold damage to reputation, brand and business associates. Of course, prevention is better than cure, and a sound system of internal control is key to minimizing risk. But if the worst happens, a comprehensive Crime policy makes for significant balance sheet protection.
A Commercial Crime Policy can be purchased as a Stand Alone policy. It will respond to a theft of money or assets, physical or electronic, by anyone. It can also be expanded to include:
As economies around the world continue to face unprecedented challenges, one thing is certain: as economies are depressed, fraud rises. Companies can protect themselves, not only through solid working methods, but with the backup of a comprehensive Crime Policy.CASE STUDY – A woman scorned
A long-standing and trusted Finance Director enjoyed full autonomy in his role. His actions were uncovered by a Whistleblower – a jilted lover.
The woman informed the Managing Director of the FD’s actions and the firm ordered bank sweeps of financial transactions. What was found was that without double-checking, the FD had simply transferred money into his own accounts.
He had spent almost £4million of the company’s money to finance a lavish lifestyle…and his four wives.About the Author
Maurice Logie is a director of Moreland Insurance, a BFA Supplier. Moreland Insurance are increasingly seeing the evidence of this “brave new world” of crime. The good news however is that insurers are fast catching up and have offerings ranging from “entry level” Data Protection cover all the way up to more complex Comprehensive offerings. The message is clear – no business can afford to ignore these threats and the insurance industry is on hand to help.
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