International Fraud Awareness Week

International Fraud Awareness Week is a global initiative driven by leaders, professionals, and organisations with the goal of reducing the widespread impact of fraud. It promotes anti-fraud awareness and education as a collective effort across industries and communities. This week is a dedicated time for raising awareness about the serious risks of fraud, encouraging individuals, families, and businesses to remain vigilant and proactive in protecting their personal and professional information.

Advances in technology mean the risk of fraud has grown exponentially. With the proliferation of online transactions, data sharing, and digital platforms, individuals and organisations are more exposed than ever to increasingly sophisticated fraudulent schemes.

How Does Fraud Affect Us?

Fraud can have a profound financial impact on businesses, regardless of size. However, the scale and severity of the losses often vary depending on the organisation’s resources and capacity to absorb such incidents.

Research has shown that larger organisations, with over 10,000 employees, experience the highest median losses, around USD 200,000. Meanwhile, smaller businesses, with fewer than 100 employees, face a median loss of USD 141,000. Since smaller businesses have less money to work with, they feel the financial hit much harder.

Beyond the size of the business, certain types of fraud can affect organisations across the board, many of which directly impact hiring programs, including:

#1 Identity Theft

Identity theft is one of the most significant and most complex types of fraud. In the most frightening scenario, someone steals your personal information and uses that information to carry out fraudulent activity such as opening new lines of credit. Identity theft is a growing concern globally, with advanced technologies like deepfakes becoming increasingly used to commit fraud.

Identity theft remains a significant issue in Australia, as highlighted in the 2023 report by the National Anti-Scam Centre. The report reveals that identity theft accounted for a substantial portion of the 601,000 scam reports made by Australians in 2023, marking an 18.5% increase from the previous year. Australians reported losses amounting to $2.74 billion due to various scams, including identity theft, in 2023.

The report also highlights the demographic distribution of identity theft victims. Individuals aged 25-34 were the most affected, accounting for 28% of all identity theft reports. This age group is particularly vulnerable due to their high engagement in online activities and digital transactions. Geographically, New South Wales reported the highest number of identity theft cases, with 150,000 incidents in 2023. This was followed by Victoria and Queensland, with 120,000 and 90,000 cases, respectively.

HR leaders are facing significant challenges related to identity theft, which has become a prevalent issue impacting various aspects of their operations. The financial burden is compounded by the complexity of detecting and reporting such crimes, as many victims do not immediately recognise the misuse of their personal information. Despite the efforts of HR departments, organisations in Australia and New Zealand face several challenges in identity security. A recent report highlighted that 60% of organisations in these regions struggle with implementing effective identity governance solutions. Additionally, the rise of remote work has further complicated identity security, as employees access company systems from various locations and devices.

As these numbers show, the use of advanced technology to commit fraud is becoming a growing concern, underscoring the need for heightened awareness. Continuous monitoring of employees during their tenure can help detect any changes in behaviour or circumstances that might lead to fraudulent activities. This proactive approach helps in identifying and addressing potential risks before they escalate.

#2 Resume Fraud

Resume fraud, in which job applicants intentionally falsify information on their resumes, is often overlooked by some hiring leaders and professionals during the hiring process. According to the report from StandOut-CV, over 64.2% of respondents admitted to lying on their resume at least once. Additionally, younger candidates are more likely to lie on a resume than older individuals, with a staggering 80.4% of 18- to 25-year-olds admitting they have lied before.

While there are many reasons why people commit resume fraud, it's often done to improve their chances of being hired. In a competitive job market, younger candidates may be more willing to do anything to secure employment, especially if they lack the relevant work experience needed to get the job they want. As the report suggests, this is a strategy that many candidates have successfully adopted to secure work.

But which part of the resume do they embellish? (See figure 1)

Source: retrieved from published information by Standout-cv.com

#3 Occupational Fraud

Fraud poses a wide range of risks, and some of the most serious threats come from within organisations themselves. Occupational fraud occurs when individuals exploit their position of trust, often to the detriment of the company. This threat is typically associated with current employees, but contractors, temporary workers, and gig workers with access to company resources can all put the organisation at risk.

According to Occupational Fraud 2024: A Report to the Nations from the Association of Certified Fraud Examiners (ACFE), out of 183 cases documented in the Asia-Pacific region, 29 (15%) of those were from Australia, with reported losses of more than $3.1 billion incurred by affected companies. In Asia-Pacific alone, the region saw the highest average loss at $1.2 million, compared to Western Europe which came in second with losses of $1 million. In Asia-Pacific alone, the region saw the highest average loss at $1.2 million, compared to Western Europe, which came in second with losses of $1 million.

How National Crime Check Help Mitigates Fraud Risks

Given the serious impact of fraud on businesses, institutions, organisations and individuals, raising fraud awareness is important to all of us. Promoting a culture of accountability and integrity can significantly reduce the risk of becoming one of the victims, which is why governments and law enforcement authorities encourage stakeholders to take active steps in preventing fraud.  

One effective way to mitigate risk is by implementing a comprehensive background check program. These programs may include criminal background checks, document verification checks, visa checks, and right-to-work verification. For example, by ensuring you're engaging with genuine individuals, employees, and candidates, your organisation can safeguard itself from potential fraud.

Whilst there may be an initial investment of time and money, the long-term protection, safety, and peace of mind it can provide makes it invaluable for the future of your organisation and your most important resource, people.

How Can National Crime Check Help?  

National Crime Check is a leading provider of background checks in Australia and New Zealand. We offer market-leading technology to conduct thorough background checks on candidates prior to making an offer of employment and on an ongoing basis.

After decades in the industry, National Crime Check has integrations with the most authoritative Australian and New Zealand government data sources to ensure screening results are accurate and timely. If you're interested in learning more what programs you can incorporate into your hiring program, contact us here to discuss your needs.