Fraud in business is on a steady rise, as most recent PwC-study shows. Top perpetrator: the customers.
We are all cautious and forewarned when it comes to hackers. While “consumer fraud” enjoys a high level of attention and numerous non-governmental organisations and consumer protection measures provide strong protection for individual customers against criminal activities of large companies – instead of this “customer fraud” receives less public attention.
But it are the customers who do most damage to the companies. According to the “PwC 2020 Global Economic Crime and Fraud Survey” (Link below), they are the largest group which is damaging companies worldwide. Even more, the rate is constantly increasing, by 35 percent since 2018.
Looking behind the walls of companies, here is primarily middle management that does the most damage to their own company, as PwC’s report again confirmed. 34 percent of internal fraud cases can be traced back to their actions.
Overall, the PwC study found that in the last 24 months this has resulted in losses amounting to around 42 billion US dollars globally. This trend is generally on the rise. Almost half of the companies have discovered cases of fraud within the last two years. This is the second highest rate during the last 20 years.
PwC cites as a reason the ever-increasing orientation of companies towards individual and direct communication and business contacts with end customers (BtoC). This is being driven primarily by the growth in e-commerce.
Many manufacturers and providers have decided to transform from BtoB to BtoC. The reasons: Higher margins and the exclusion of middlemen. Now the other side of the coin is beginning to show. Raising a website and buying in some logistics and extra-services is not the whole story when not having in mind that not all customers arrive with good intentions
The study by PwC is available here: