This supplement is an independent publication from Raconteur MediaNovember 12 2008
FRAUD PREVENTION
Together, we
can beat fraud
It takes a former policeman to say what far too many infraud prevention are nervous about admitting: thatfraud prevention can’t be done by expecting the policeto arrest the fraudsters, writes Guy Kewney. “It is,” says Tim Harvey simply,“incredibly difficult to get a fraudinvestigated.” Harvey is former deputyhead of the Fraud Squad and now UKhead of operations for ACFE, theAssociation of Certified Fraud Exam-iners. His objective is to reduce fraud. Like many involved in the newregime of anti-fraud in the UK, fromthe brand-new National FraudReporting Centre through the SFO toindependent campaigners like eVic-tims, he believes things can beimproved. The fight against fraud canbe stepped up. But, he emphasizes, itcan’t be beaten by pretending we havethe resources to stamp it out – unlesswe change our habits of trust.The basic problem is that most of ushave a very low level awareness of howwidespread fraud is; and we tend totake a relaxed attitude to a lot of it. Wehave our credit card cloned; we mayworry a bit, but then the card companycancels the payments made by thecriminal, and we forget. One area where public awarenessshould be better, is in our workplaces.Some of our colleagues are fraudsters,and often, the people sitting aroundthe crooks actually suspect they are upto something – but don’t report it,because quite simply, they don’t believeanything will be done. And the reasonthey don’t believe anything will bedone is quite simple: the perpetrator istheir boss. Also, quite a few of themdecorate their own expense claimswith small-scale fraud, and feel reluc-tant to draw attention to themselves.One large company was brought toits own destruction by a web of fraud.Each director was involved in a sophis-ticated, but separate fraud. Each dif-ferent scam provided one directorwith 80 per cent of the illegal profits;and the managing director got 20 percent. One by one, the boss pulled eachspider into his web, and ended upsecure in the knowledge that the onlypeople who could betray him, certain-ly wouldn’t. Staff who became awareof wrongdoing quickly found that thewhole board was united in theirrefusal to take any issue seriously. Andif the managing director’s wife hadn’ttumbled to one particular scaminvolving his secretary (they were hav-ing an affair) the frauds might neverhave been uncovered. But the company went bust, evenafter she popped the fraud bubble. We may expect law enforcement tocarry the load. If we do, we’re expect-ing the impossible. That’s not to saythat enforcement can’t be made better;it can be, and it is being rapidlyContinued on page 5Look around youFraudsters do not lurk in the dark. They are thethe people sitting next to you, the friends youshare a drink with after work.page 4Alex Conran, presenter of the BBC’s The Real Hustleand self-proclaimed conman.“This special report shows why, despite ever-increasing attempts to make things moresecure, fraud is rising in business, on the internet, on the High Street, and in commercegenerally. In the end, we can improve detection and we can improve prosecution, but on itsown, that won’t cure the problem. Increased education, public awareness and vigilance iswhat can make the ultimate difference.”See page 19 The promise of ITThere is no easy way to defeat fraud. But someof the latest data analytics tools hold out hopefor the future. page 8PIN, chips, and tearsThe retailer simply cannot win. Block all fraud,and the shoppers all start complaining aboutinconvenience. page 14