Fraud costs Irish firms up to €750k, cybercrime doubles in two years

23 Apr 2014

While a quarter of Irish businesses admitted suffering economic crime in the last two years, 40pc of these say the financial impact has been any amount up to €750,000. Also, cybercrime has doubled in the last two years to encompass 45pc of fraud cases.

The PwC Irish Economic Crime Survey published today found one in five companies had experienced more than 100 incidents of crime, up from 14pc in 2011, and double the 2014 Western Europe experience.

The type of fraud is changing, with less accounting fraud as fraudsters turn to high-tech ways of committing economic crime.  

Theft remains the most common form of economic crime, reported by 75pc of respondents who experienced crime.  

The types of fraud that have experienced increases in the period include cybercrime (up from 24pc to 45pc), mortgage fraud (up 25pc), money laundering (up from 19pc to 25pc), and competition law/anti-trust law, IP infringement, procurement fraud and bribery and corruption (all up 5pc).

“Economic crime persists despite ongoing efforts to tackle it. No organisation of any size anywhere in the world is immune to the impact of fraud and other crimes,” said Paul Tuite, advisory leader at PwC.

“Even worse than the direct impact of economic crime is its cost in terms of management time, its threat to a wide range of business systems and processes, and its impact on corporate reputations and  the integrity of employees.  

“Organisations cannot afford to be complacent – they need to understand where and how they are exposed to economic crime and then to make it more difficult for crimes to be committed.”

Irish businesses take a dim view of fraud and it leads to dismissal in 71pc of cases.  Police were called in to companies in 62pc of cases.  

Organisations taking civil actions, including seeking recoveries, has increased. This is perhaps reflective of the tough economic environment of the last number of years.  

Cybercrime risks

Respondents in Ireland are more aware than ever of the risks associated with cybercrime, with 62pc confirming they expect these risks to increase in the next two years (53pc in Western Europe expect the same).  

In terms of financial loss, 23pc of organisations who were the victim of cybercrime suffered a loss of between €40,000 and €75,000, while 18pc said this loss was between €75,000 and €750,000.  

Six per cent said their loss totalled nearly €4m.

Non-financial impacts included reputational damage (45pc), loss of personal identifiable information (41pc) and service disruption (40pc).

“Many people may not be reporting cybercrime simply because they don’t know it has happened, or because they want to keep it contained,” said Ciaran Kelly, advisory partner, PwC.  

“They are concerned about what effect it has on their reputation. It’s also important to remember that it is not a technology problem, it’s a human problem, and the internal threat needs to be taken as seriously as the threat from outside an organisation.  

“As such, this is a challenge which requires a response that is grounded in strategy and judgment about business process, access, authority, delegation, supervision and awareness – not merely tools and technologies,” Kelly said.

Hacker image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years