Company security and IT departments usually are guarding the castle walls to repel external attacks. But perhaps they should look inward. According to the 2015 Kroll Global Fraud Report, 81 percent of companies that have been victims of fraud this year have been dinged by their own people.
In a further breakdown of those insiders, Kroll says that 36 percent of fraud victims experienced fraud at the hands of a member of their own senior or middle management, 45 percent at the hands of a junior employee and 23 percent fraud resulted from the conduct of an agent or intermediary.
Kroll also found that most technology attacks begin inside the walls. “Among companies that experienced information/data loss, theft or attack over the past 12 months, the most common cause was employee malfeasance” for 45 percent of respondents, Kroll says. And incidents involving vendor/supplier malfeasance were at 29 percent. By comparison, the firm says, external hackers tried to gain access or steal for only 2 percent respondents and 7 percent for vendors/suppliers.
Overall, according to Kroll, 69 percent of businesses suffered a financial loss as a result of fraud, up from 64 percent in last year’s survey. Physical asset theft was the most common fraud experienced (22 percent), followed by vendor, supplier or procurement fraud (17 percent) and information theft (15 percent).
That low info theft is telling, given all the hype from threats from external hackers. As Kroll suggests, while tech is trendy when it comes to fraud, it’s the simple snatch and grab by employees and others that cost the most.
“While technology has enabled new ways to perpetrate fraud, our daily work with clients confirms what the report also reveals — that old fashioned theft, bribery and kickbacks are still amazingly effective and pervasive,” Kroll chairman Daniel Karson says.
With friends like these, who needs enemies?