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Fraud Summit

Fraud and its imprint on the Romanian business environment

Corporate fraud is a rarely addressed topic in public communication, therefore, dismantling the fraudulent phenomenon is not always a priority for entrepreneurs or managers. However, the imprint of fraud on the Romanian business environment is strong, and its effects can be devastating.

According to PwC’s Global Economic Crime and Fraud Survey 2020, worldwide, almost 1 in 2 companies are affected by fraud. It is the second highest level of fraud in the last 20 years!

Regardless of the industry in which it makes its presence felt or the size of the illegal act itself, fraud is of 3 types:

External fraud, committed by elements outside the company – whether customers, criminals, hackers, subcontractors, distributors or suppliers. Global estimates show that 39% of fraud suffered by companies has an external source.

Internal fraud, also called occupational fraud, is committed by employees and reaches values ​​that are approximately equal to those of the external one. Specifically, 37%, according to the same PwC study. The distribution by management levels is about equal: 34% of fraudsters are part of middle management, 26% of top management, while 31% work in operational departments.

Mixed fraud occurs when external and internal fraudsters work together. 20% of the frauds that affect companies fall into this typology.

The prejudice resulting from the fraudulent act is not only reflected in the direct financial plan. In addition to the pecuniary losses resulting from illicit acts, a company will also be affected by fines and costs generated by anti-fraud measures taken to stop fraud immediately, but also for risk management to be implemented preventively. To these, we add more difficult-to-quantify costs, including damage to the company’s brand image, declining market share, psychological impact on stakeholders, reputational risk, loss of customer confidence, team’s declining morale, productivity and confidence, or the loss of subsequent business opportunities.

Although it has consequences that can be devastating for a company, fraud is not invincible – it can be prevented – if it has not been committed yet – respectively identified, proven and punished, if it has already taken place. Moreover, the damage can be quantified and recovered. Testimony in this regard are the 6 million euros, the estimated value of the damage identified and documented in the 12 anti-fraud investigations carried out by SPIA – Secret Private Investigations Agency in the last 3 years.

In a top of the industries most exposed to fraud, in Romania, the first places would be occupied by insurance, energy, trade and banking, with fraud being committed mainly offline.

In terms of cross-border crime, the insurance industry is the most vulnerable, with fraud being committed by well-organized, globally operating networks with a wide range of resources, know-how and methods, which they constantly diversify and improve.

The new socio-economic context has accelerated the transfer of crime in the online environment and expanded the scope of companies at risk. The pandemic caused by the new coronavirus has led to another pandemic: that of fraud, especially cyber fraud.

Online fraudsters know which buttons to press in order to trigger the action they want. They create a sense of urgency and rely on people’s need to react quickly to a situation that presents themselves as risky, and then, they mentally and emotionally manipulate the victim, so that she does not carry out verification and due diligence activities. Among the most used methods of cyber fraud are spam messages, malware attacks and phishing emails.

As a conclusion, fraud is not a phenomenon we only hear about and see in the news or read in the newspapers. Fraud does not only affect the richest. In the business environment, fraud is much more present than you would expect. The first step we can take to change something is to publicly talk about the fraudulent phenomenon. Recognize its existence, do not be afraid of concrete examples, learn from colleagues who have already faced the phenomenon of how to protect our company, talk openly about existing anti-fraud measures and be aware of the importance of prevention.

This is how FRAUD SUMMIT by SPIA was born – the event that will bring together, on the same stage, top representatives of industries and companies that managed to control the phenomenon, specialists in prevention services, identification and dismantling of illegal groups and representatives of the authorities and of profile associations.

Since its first edition this year, FRAUD SUMMIT by SPIA aims to be the largest event in Romania dedicated to the imprint of fraud on the business environment in our country, with a single goal: to raise awareness of the imminent risk of fraud and its consequences, as well as to make known the existing solutions.

On May 27th , starting with 09:00 (EEST), FRAUD SUMMIT by SPIA is filmed and broadcast live from the Le Chateau Bucharest stage, with Marian Hurducaș, former journalist, current communicator and digital expert, as host and moderator.

Access to the event is free and is based on registration, here: www.fraudsummit.ro .

FRAUD SUMMIT is an event organized by SPIA – Secret Private Investigations Agency, leader of the Romanian new generation of private investigators and supported by act Botezatu Estrade Partners, as Main Partner, respectively Wall- Street.ro & KISS FM, Media Partners.