Who Polices The Fraud And Security Managers?

UKFraud SIG Identifies The Measures That Need To Be In Place

Following the recent high profile cases of senior fraud and online security managers being caught up with fraudulent activity, UKFraud’s Special Interest Group (SIG) for Corporate Fraud Prevention has drawn up a new set of benchmarks which will help organisations identify the signs that something is awry. The SIG also outlines the most effective strategies for countering these risks.

Recently established by UKFraud, the Corporate Fraud Prevention SIG consists of leading fraud prevention consultants coupled with representative input from a wide range of fraud industry skill sets. The SIG was established in response to sector frustration at recent claims by the UK’s National Fraud Authority that fraud levels have risen significantly from £38bn in 2011 to £68bn in 2012. The aim of the SIG is to analyse the approach taken to fraud in the corporate sector and to make recommendations for change at local, national and global levels.

According to the SIG’s research, the most likely signs of wayward behaviour by fraud and security management are relatively easy to spot and yet often overlooked. They include:

Fraud Systems that are below par. The fraud systems chosen by an organisation can be unfit for purpose and may not deliver what is required. There is also often an unwillingness, due to the influence of the internal fraudster, to consider competitive fraud technology products that do deliver or that can deliver more quickly. Often, the SIG says, it is easy enough with hindsight to see that a change to effective systems had been deliberately avoided, but typically, career minded employees are reluctant to blow whistles.

Erratic, incomplete, late or excuse laden management and system reporting is a classic sign that line managers are covering something up and says the SIG, this is just as likely to be the case with those fraudulently managing the security and anti-fraud systems of a company. Normally, further investigation will reveal that ‘lip service’ and increasingly tenuous explanations are given assertively to thwart follow up activity. When though one is dealing with an errant fraud manager, these explanations are more difficult to see through and more than likely to pass the plausibility test. Often the blame for the cause of any suspicion will be thrown onto inadequate IT systems or on the political gaps between corporate silos.

Frequent excuses are often based around IT related issues, such as technology compatibility problems between different company systems or even between international systems.

Unexplained wealth of managers outside of work. There will be plenty of evidence of the rewards of wrong doing with fraudsters purchasing luxury housing, wardrobe, holidays, cars and home computing equipment together with other rewards for family and friends which can even extend to private school fees for children.

Work place rumours, jokes and tip offs. These are often dismissed as political jibes but often this is a tell tale sign that something is wrong and that staff are too afraid to ‘blow the whistle’ formally.

Frequent use of the ‘privileged rank’ of Security or Anti-Fraud Manager to divert questions or to avoid enquiries from those who might raise suspicion, such as the internal or financial auditors. This also includes the robust use of the ‘we don’t want to compromise security by answering your questions’ excuse.

Where fraud specialists know the latest trick, for example how on-line fraud works, the unique symptoms of that particular scam will show up in the company where the internal fraudster is using it themselves.

UKFraud’s Corporate Fraud Prevention SIG believes that ‘maintaining an independent review perspective managed by those with the greatest experience’ is the most effective solution for combating inside jobs by fraud and security management. Amongst the strategies the SIG would recommend are:

A greater emphasis on the use of Non-Executive Directors. This is crucial, says the SIG, as usually Non-Execs are appointed for their experience of skills and operations in other organisations and sectors. They have that ‘other worldly’ eye that is able to cast a different perspective. They should have the ability to review all aspects of a company’s anti-fraud strategy and to ask awkward questions ‘from the top’ as this carries more weight.

Up-to-date reporting must be a core mantra of good company management, with the details of repeated exceptions thoroughly investigated. Organizations should also ensure that reports are not only timely but that they are also complete, real and updated as required. These processes should also then be built into the internal audit schedule for checking. This in turn should feed into the main GRC (Governance Risk and Compliance) systems. In addition, wherever appropriate, organisations should adopt an enterprise-wide approach to technology as this will help with systems issues. Thus, if the technology works well in all other parts of an enterprise, it is highly noticeable if it fails in the management of the fraud department or the control of online and financial systems.

Organizations need to establish records both electronically and on paper. This should include specifying where documents are and when they should and should not be stored. One should identify who is in control of these systems, processes and procedures and who has ownership of specific records. Organizations also need to decide who is responsible for checking that these measures are followed. The scanning, and indexing of work needs to be carried out to professional standards and there must be rules to ensure that no-one can intercept/edit documents at an inappropriate stage or in a fraudulent way. It is also important, the SIG believes, to ensure that your storage capacity is controlled properly.

Where acquisitions and mergers are concerned, organizations need to ensure that all documents are available and stored appropriately and securely, especially those that relate to IP protection, IP development records, audit trails and staff contracts. In particular, when acquiring a business, companies must make sure that they have indemnities and penalty clauses built into the acquisition agreements which relate to the availability of data, logs, audit trails and so forth.

An extra fraud prevention ‘task-set’ should be drawn up for auditors and IT auditors whether they are internal or external. This can have a real impact, although sadly most auditors are simply there to either report on financial results or check asset lists and software licence compliance. There are though many specialists that can undertake ‘special’ tailored checks to find frauds within all manner of business systems including: payroll, invoicing or payments. By turning them towards checking the efficacy of the security and fraud systems in place, says the SIG, it is not only a greater deterrent but also a far more certain way of catching wrong doing whilst in flight.

Getting HR more involved. This allows you to define responsibilities and handle warnings for non-compliance.

Organisations should actively consider the use of external risk consultants who can offer solutions which benefit from an independent viewpoint that resides outside of a company or its politics.

Where doubts exist, organisations should contemplate the use of private investigators to look deeper into the processes used by those who are deemed to be high risk people. These need to be the breed of computer literate investigators with corporate fraud experience.

SIG member Malcolm Gardner, the CEO of fraud prevention consultancy Freevision Ltd., believes that the situation may be worse than many fear. In his view, “Typically, when fraud or security managers are caught, it is either because they went too far, having become complacent, or where there has been a tip off. This tends to suggest that those who are caught might simply be the tip of the iceberg. With sectors such as the online market, now so very tempting to fraudster, it can also be tempting for internal cheats too. Corporations need to be sure of their staff and need to put the right systems in place to help the loyal staff who are the ones still working for the good of the company.”

Bill Trueman the CEO of RiskSkill and UKFraud, echoed Gardner’s comments adding, “It is awful whenever any fraudster is identified within a business, but if it is the person who has the responsibility for fraud prevention themselves, then this is even more abhorrent. Within the fraud SIG, we all universally believe that these fraudsters who were identified as fraud specialists themselves should have significantly more severe punishments, for abusing these particular positions of trust. The first step is finding them and then managing the problem. Hence, our SIG was keen to put these guidelines in place for all to benefit. We would welcome any feedback on other pointers and precautions that people feel might be also of benefit in future SIG reports.”

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Insurance Fraud Prevention Strategies and Techniques

Defeating Insurance Fraud – The Opportunity Is So Close At Hand

How to Prevent Insurance Fraud…

Bill Trueman CEO of UKFraud and RiskSkill, leading  risk and fraud prevention consultancies and analyst believes that if the insurance industry has a significant opportunity to drive fraudsters away. Here he outlines the steps the sector should take …..

The insurance industry should accelerate its activity in the management of fraud and fraudsters. For whilst huge in-roads have been made into combatting insurance fraud in the UK, there is an enormous opportunity in these times of big data analytics, for the insurance industry to up its game. This they can do through the more effective sharing of fraudster and criminal information and through better collaborative data management. So in a bid to encourage the industry to be more aggressive with insurance cheats and to keep pace with other sectors such as banking, here is a four point plan for the insurance industry. Its biggest and first aim is to prevent fraudsters from ‘entering the system’ in the first place.

Bill Trueman

1.  Know Your Customer and Anti Money Laundering Standards Must Be Applied To The Insurance Sector
In the insurance sector, there is no legislative requirement upon insurers to identify a customer’s identity, or to follow KYC (Know Your Customer) or AML (Anti Money Laundering) standards. This is in sharp comparison to nearly all other professions which must now follow both KYC and AML requirements. Sectors already included are: banks, lawyers, accountants, mortgage and rental providers, card companies, utility providers, gambling organisations and telecom companies. Technology enables professional service companies in all these sectors meet these stringent requirements even before accepting a client’s business. The compliance levels adhered to also include the Prevention of Terrorism Act and Drug Trafficking regulations. Why then, asks UKFraud is the insurance sector free of these standards, even when it is a frequent victim of fraud and can claim annual fraud losses of between £1billion and £2billion, or up to 10% of our premiums in some portfolios?

There is no rationale for this lack of KYC/AML authentication, believing that the absence of such tools encourages fraudsters to target the sector. The solution is for the insurance industry to demand KYC / AML regulations to be extended to the insurance sector, as this move alone could significantly reduce the risk of fraud. This would also reduce the costs of dealing with fraud and change the industry’s entire customer service mix.

2. Deter Fraudsters At The Outset

With the KYC and AML systems in place, all industry stakeholders and interested parties should then also adopt a range of other systems to deter fraudsters and money launderers right at the beginning; at the underwriting stage. This can be achieved through industry wide collaborative reviews of IT systems, document management processes, telecoms applications, call centre logs, internal fraud management policies and marketing collateral. This review should also be backed up by the introduction of the latest fraud prevention systems capable of identifying behavioural pattern anomalies at an early stage, which should include the use of the latest ‘neural’ fraud detection system to react quicker to changing fraud trends. Using 1980s scoring and red-flag type indicators is particularly outmoded and yet still commonplace.

3.  Keep A Database of the Cheats
88% of all people we surveyed last year believed that a comprehensive industry wide database of such information already existed and was being used extensively across the insurance sector. Only a few inspired insurance companies though, regularly share in anything more than an ad-hoc manner, details of known fraudsters. This is despite the forceful warning messages that most customers hear when they call in to some insurers. Fraudsters know that such databases are rare and exploit this weakness to their advantage. The exceptions are the leading insurers that do share data with the banks, telecom companies and many other sectors through CIFAS who operate such services and are now working positively with many other sectors including a number of leading public bodies. Amongst this group of leading insurers are the really forward thinking companies who find more of the liars and cheats using device identification technology in the sales process (as well as the claims process) and then make sure others are aware.

4.  Zero Tolerance
Complacency to the risk of fraud is the biggest potential risk in the insurance sector. Insurers, says must not get complacent and must not only always look for the next major anti-fraud initiative, but evolve the thinking in the sector and drive forward new initiatives to catch up with and stay ahead of the market – whether this is just the UK market or the global insurance market.

The industry must then work together and collaborate closely to drive such a strategy. In doing so, they should adopt and reinforce a ‘zero tolerance’ approach to driving fraudsters operationally ‘out of insurance’ for the long run. The tools are there, including the latest developments in personal identity verification systems, device identity technology and behavioural analytical systems together with use of big data analytics, and change-event screening / scoring. This must also include increasing the number of ways in which companies share experiences and data with others.

The sector needs to find a renewed and strengthened attack and momentum. In my view, there needs to be a much stronger, infrastructural change in what the industry does to drive a major part of the problem away from the insurance sector once and for all. Between £30 and £60 of every policy is added to pay for fraudsters. And with up to £2billion in insurance fraud each year something has to be done. It is no good just dealing with the problems when they arise, the industry as a whole should be doing much, much more to prevent, deter and to stop the liars and cheats setting up policies in the first place; or to find them much sooner if they manage to do so.

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UKFraud Calls For Pre-Emptive Data Management Collaboration To Combat Insurance Fraud and Money Laundering

Leading UK Fraud prevention consultancy and analyst UKFraud (www.ukfraud.co.uk) is calling on the insurance industry to accelerate activity in its management of fraud and fraudsters. In its latest research, UKFraud recognises that huge in-roads have been made into combatting insurance fraud in the UK, but believes that in these times of big data analytics and collaborative systems, that the insurance industry could do better. This, says UK Fraud, can be achieved by sharing fraudster and criminal information and through better collaborative data management. So in a bid to encourage the industry to be more aggressive with insurance cheats and to keep pace with other sectors such as banking, UKFraud has drafted a four point plan. Its aim is to prevent fraudsters from ‘entering the system’ in the first place.

1. Know Your Customer and Anti Money Laundering Standards Must Be Applied To The Insurance Sector
In the insurance sector, there is no legislative requirement upon insurers to identify a customer’s identity, or to follow KYC (Know Your Customer) or AML (Anti Money Laundering) standards. UKFraud feels that this is in sharp comparison to nearly all other professions which must now follow both KYC and AML requirements. Sectors already included are: banks, lawyers, accountants, mortgage and rental providers, card companies, utility providers, gambling organisations and telecom companies. Technology enables professional service companies in all these sectors meet these stringent requirements even before accepting a client’s business. The compliance levels adhered to also include the Prevention of Terrorism Act and Drug Trafficking regulations. Why then, asks UKFraud is the insurance sector free of these standards, even when it is a frequent victim of fraud and can claim annual fraud losses of between £1billion and £2billion, or up to 10% of our premiums in some portfolios?

UKFraud feels there is no rationale for this lack of KYC/AML authentication, believing that the absence of such tools encourages fraudsters to target the sector. The solution is for the insurance industry to demand KYC / AML regulations to be extended to the insurance sector, as this move alone could significantly reduce the risk of fraud. This would also reduce the costs of dealing with fraud and change the industry’s entire customer service mix.

Bill Trueman
Bill Trueman

2. Deter Fraudsters At The Outset
With the KYC and AML systems in place, all industry stakeholders and interested parties should then also adopt a range of other systems to deter fraudsters and money launderers right at the beginning; at the underwriting stage. This can be achieved through industry wide collaborative reviews of IT systems, document management processes, telecoms applications, call centre logs, internal fraud management policies and marketing collateral. This review should also be backed up by the introduction of the latest fraud prevention systems capable of identifying behavioural pattern anomalies at an early stage, which should include the use of the latest ‘neural’ fraud detection systems to react quicker to changing fraud trends. Using 1980s scoring and red-flag type indicators is, feels UKFraud, particularly outmoded and yet still commonplace.

3. Keep A Database of the Cheats
88% of all people surveyed by UKFraud last year believed that a comprehensive industry wide database of such information already existed and was being used extensively across the insurance sector. Only a few inspired insurance companies though, says UKFraud, regularly share in anything more than an ad-hoc manner, details of known fraudsters. This is despite the forceful warning messages that most customers hear when they call in to some insurers. Fraudsters know that such databases are rare and exploit this weakness to their advantage. The exceptions are the leading insurers that do share data with the banks, telecom companies and many other sectors through CIFAS who operate such services and are now working positively with many other sectors including a number of leading public bodies. Amongst this group of leading insurers are the really forward thinking companies who find more of the liars and cheats using device identification technology in the sales process (as well as the claims process) and then make sure others are aware.

4. Zero Tolerance
UKFraud believes that complacency to the risk of fraud is the biggest potential risk in the insurance sector. Insurers, says UKFraud, must not get complacent and must not only always look for the next major anti-fraud initiative, but evolve the thinking in the sector and drive forward new initiatives to catch up with and stay ahead of the market – whether this is just the UK market or the global insurance market.

The industry, says UKFraud must then work together and collaborate closely to drive such a strategy.   In doing so, they should adopt and reinforce a ‘zero tolerance’ approach to driving fraudsters operationally ‘out of insurance’ for the long run. The tools are there, says UKFraud, citing the latest developments in personal identity verification systems, device identity technology and behavioural analytical systems together with use of big data analytics, and change-event screening / scoring. In addition, UKFraud believes that this must include increasing the number of ways in which companies share experiences and data with others.

Bill Trueman, CEO at UKFraud and RiskSkill, whilst applauding where the industry has come from to date; now calls for the sector to find a renewed and strengthened attack and momentum. In his view “We need to make a much stronger, infrastructural change in what the industry does to drive a major part of the problem away from the insurance sector once and for all. Between £30 and £60 of every policy is added to pay for fraudsters. And with up to £2billion in insurance fraud each year something has to be done. It is no good just dealing with the problems when they arise, the industry as a whole should be doing much, much more to prevent, deter and to stop the liars and cheats setting up policies in the first place; or to find them much sooner if they manage to do so.”

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4 Reasons Why Mobile Payments Are Risky

Mobile Payments Challenges, Risks, and Solutions

The expected rapid growth of the mobile-payments market will create a potential “cocktail” of different risks that pose new challenges for risk managers and other players in the sector.

That’s one finding in new research from RiskSkill, a corporate risk prevention consultancy, and a division of UKFraud.

Riskskill studied developments in the mobile-payments arena, including all types of mobile payment services – mobile money and mobile wallets – which are subject to financial regulation and performed from or by mobile devices. The consultancy has identified some key risk areas:

1. The scale of sector growth and technology change. Riskskill says many risk professionals are concerned about projections that the mobile-payments business will reach $1 trillion in global transactions by 2015. That growth could mean that many proven risk strategies, once thought of as realistic and elastic, could be left out of touch in the medium term and lack the solid infrastructure required to be able to accommodate such growth.

2. The globalization of mobile payments. The explosive growth of m-commerce in China, India, Latin America and the Far East are a concern, Riskskill says. Recent data from the ITU (International Telecommunication Union) points to global mobile subscriptions now reaching 6 billion. In some of these newer areas, the mobile-payments sector is compensating for the lack of a physical and sufficiently robust banking structure and therefore proves extremely popular. Consequently, while the growth figures are impressive, the rate of growth could draw into question whether the existing and, on occasion, young nascent regulatory systems and controls are sufficient to cope.

3. Consumer communication and information risks. Riskskill says the sector consists of a continuous stream of new financial products that are all seeking to outdo each other in the eyes of providers and consumers. Alongside other areas of rapid market change, a fast churn of product lifecycles and the sheer variety of product nomenclature might cause consumers to become confused, and thus more vulnerable to fraudsters exploiting their confusion. This will also be compounded by the absence of adequate fraud systems which will not have been put in place by all the main players, at an early stage, as some will only just have kept up with competitive product development, Riskskill advises.

4. Are standards and regulation outpaced? The impact of this rapid technology evolution could threaten the applicability and implementations of many existing standards programs. Other newer standards will need to be evolved, although these too might still struggle to keep up with the rate of change.

“It is easy to plan for many risks individually – however, the wide and varied nature of the risks associated with the changing and rapidly growing mobile payments sector creates a whole array of risks that will challenge even the best of plans and strategies for addressing problems within the mobile payments sector,” said Riskskill CEO Bill Trueman. “This is a simply enormous issue to address. Organizations and indeed many governments are often now too ‘silo based’ to evolve direction and protection from the attacks in a market that is so rapidly evolving. The ideal solution for leading sector stakeholders should be to drive proper standards through appropriate bodies that will in turn drive both a governmental and a business response globally. It’s a tall order and only time will tell if it is possible.”

 

Mobile Payments Sector Growth Could Bring Fresh Fraud Challenges Says New UKFraud Special Interest Group

UKFraud (www.ukfraud.co.uk) has set up a new Special Interest Group (SIG) for the Mobile Payments sector. The new SIG will monitor, analyse and report on key market developments for use by stakeholders in the domestic fraud prevention sector. The SIG consists of leading fraud prevention consultants coupled with representative input from a wide range of mobile payment industry specialists. In its initial review, the SIG will analyse those characteristics and challenges of the mobile payment market that are most likely to encourage fraudsters to target the sector. In particular, the SIG will investigate the factors that could give rise to an increased risk of fraud. Amongst the key market challenges that the SIG will review are:

1 Sheer Scale of Market Growth
The SIG notes the appearance of a number of spectacular recent mobile payment market forecasts. These include a report from Reuters, in March 2013, highlighting a survey by ‘Heavy Reading Mobile Networks Insider’ suggesting: “The mobile payment industry is growing, offering revenue generating solutions throughout the market and potentially… $1 trillion in global transactions by 2015.”

The SIG is also conscious of the global spread of mobile payment, with the explosive growth of m-commerce in the United States, China, India, Latin America and the Far East. Recent data from the ITU (International Telecommunication Union) supports this, pointing to global mobile subscriptions now reaching 6 billion. However, in the face of this backdrop of explosive growth, the SIG is concerned that key sector protagonists lack visible preparedness for the likelihood of such large-scale market expansion or the resultant fraud risks that might ensue.

Indeed, the SIG believes from its own analysis of the sector, that only a small proportion of marketers currently have any formal strategy for leveraging and exploiting mobile payments fully. And, whilst there are also other reports that there is a huge need for ‘Mobile SEO’ to spread the news of the latest products to potential consumers, it is the SIG believes, also still a relatively scarce activity. Should this scenario represent reality on the promotional side, then it is also unlikely, the SIG believes, that adequate fraud systems will have been put in place by many of the main players either.

2 The Speed of Technology Advances
The SIG also recognises that the greatest challenge to the development of plans and strategies that align organisations within the mobile payments sector is the sheer speed of technical change. Seemingly, all the main mobile device players are racing to produce the ‘next best thing’ and major forces such as Google with its Wallet and Apple with the Passbook are also having a significant and positive impact with market pundits. The international card schemes also have an influence on the development route(s) as do many other highly innovative and respected third parties including:  iZettle, mpowa, and PayPal. However the chances are, says the SIG, that whilst some of the other sector protagonists, regulators and customers could potentially struggle to keep pace with such an enormous rate of change, the fraudster thrives in such fast moving environments and simply ‘adapts’ like an ‘amorphous entity’ to outsmart and outflank the market’s developments.

3 What Are The Customer Perceptions of The Mobile Payments Sector?
Amongst the other contradictions to be reviewed by the SIG are claims by some pundits who point to the relatively modest levels of take up of mobile payment products to date. Whilst some believe that many people are waiting until the next ‘big thing’ appears, others cite the plethora of new products already appearing. Some claim that this consumer reluctance to adopt, is the result of confusion over the number and nomenclature of devices and financial products. Yet others highlight a number of recent high profile data breaches both amongst financial services and social media companies which drive caution amongst consumers. However, it is felt that once a major new standard or solution appears that the dam could break. When the dam breaks, the SIG feels, there is a potential concern that some of the new solutions will be more easily and quickly exploited by fraudsters than those that currently benefit from clear best-practice and consumer guidelines.

4 Can Standards Keep Pace? 
Whilst standards would boost consumer confidence, the impact of technology and financial product churn coupled with extreme growth could, the SIG believes, threaten the applicability of many existing standards. Other newer standards might simply not keep pace. There is also, the SIG believes, a myriad of organisations from which such standards can come. This could well cause confusion for consumers and therein delight the fraudsters.

The SIG feels that a widely respected organisation that might potentially take a positive lead in the payments sector is UK Payments (formerly APACS). The SIG will also review other alternatives and analyse which existing standards bodies might develop an effective solution. Well regarded bodies might include: the ISO or the European Payments Council, which could potentially, some feel, develop a new SEPA regulation for the mobile sector. The SIG will also review whether widely acclaimed and respected card schemes (such as: Visa / MasterCard etc.) might take a lead as there is potentially a strong interest to capture the market if it grows rapidly.

The SIG feels that potentially mobile payments control could be evolved through an entirely new ‘standard’ that will develop by default and be adopted by others. It is possible, says the SIG, that this could be led by a card organisation, a proprietary payments provider, by an individual bank or a telecoms company. Indeed, the SIG believes that there is every chance that it could result from a collaboration or spin-off of any of the above. Indeed, as things roll-on so fast, this body may not yet exist.

Mobile payments could potentially, the SIG claims, replicate traditional magnetic stripe read transactions; or even replace the later ‘chip read’ transactions. This would cause an evolution in ecommerce transactions through m-commerce, and be the ideal facilitator of NFC contactless payments. In addition, mobile devices could very well become the first choice to be used by merchants as a payment acceptance terminal themselves.

5 Who Owns The Regulation?
The SIG will also review whether a ‘potential standards debacle’ might have a ‘knock-on’ effect upon regulation. The SIG feels that there are so many complications, and so many interested stakeholders, all with conflicting desires to collaborate or compete, that it is hard to know where and how mobile payments will be regulated, let alone who will ‘own’ the regulation.

It will be interesting to see the role governments play. The SIG feels that with the respected EU Cyber directive focussing on setting good foundations with the Network and Information Security standards in individual member states, the current thrust seems potentially a long way from specifically addressing mobile payments. Turning to the UK, the SIG questions whether the government is likely to drive innovation in this area, as the risk, payments and fraud skills within the leading departments (Cabinet Office, FED and the National Fraud Bureau) might not be those required.

Commenting on the new SIG, its Chairman Kevin Smith (a former head of fraud management at Visa Europe and now an independent payments, risk and fraud specialist) feels that the review will highlight a need to ‘build fraud prevention in’ at all stages early on. He notes, “There will be so much potential change and growth, that it’s not just the technology vendors or financial service providers that are watching the situation closely. Rest assured that a seasoned group of criminals will be looking just as closely, albeit at a different range of opportunities. Only by sharing information and working together at an early stage can the sector start to properly understand the challenges and offer a really effective series of counter-measures. Our aim is hopefully to assimilate and collate a weight of analysis that will prove useful to those stakeholders who are keen to fend off fraudulent activity.”

Bill Trueman CEO of UKFraud and RiskSkill welcomed Smith’s comments. In his view, sharing information and collaboration could work at all levels and could even be led by the UK government. He notes, “Potentially there is a golden opportunity here for the UK to take a lead. Naturally a governmental lead would be preferable. However, some feel that The NFA (National Fraud Authority) and also the Cybercrimes Unit are rather more engaged in defending UK Plc., against attacks than driving commercial standards globally in internationally applicable growth areas such as this. However, they should play a major role here. Some though feel that recently the priority of these bodies has been turned upon the domestic public sector, as this alone is a mammoth area to direct and protect. Hopefully, though, if the mobile payments sector grows as fast as has been suggested, the UK government will then see an opportunity to invest an appropriate amount of money in safeguarding the UK from fraud in the mobile payments sector. In the meantime, we shall work alongside other like-minded groups as a collective approach is certainly one way to ensure that the right information is shared by those in fraud prevention who most need it.”

The SIG’s findings will be published later this year.

About UKFraud (www.ukfraud.co.uk)

UKFraud is a leading UK based consultancy, with an impressive international track record of eliminating the risk of fraud. Its founder Bill Trueman is widely accepted as one of Europe’s leading fraud experts and a frequent commentator and writer on the issues involved. Trueman has extensive experience of the banking, insurance and the financial services sectors and is a thought leader at the forefront of many industry wide and international debates.

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Mega Fraudsters Are Often NOT Held Responsible For Most of the Frauds.

The vast amount of fraud in most developed countries takes place from lots of people stealing more modest amounts from government and from large corporations. So whilst we may occasionally read about the $ multi-million losses perpetrated by individuals, this is comparatively rare.

There are many tens of thousands of people who steal $10 – $10,000 every day through false benefit applications, bogus grants, insurance claims, local authority claims, injury claims, stolen card usage and walking away from utility bills or internet orders. Oddly, the widespread deployment of IT systems to manage corporate fraud and corporate processes often makes business fraud easier, as fraudsters prefer such faceless processes to dealing with real people, thus making corporate fraud losses prevention difficult.

UKFraud is an independent fraud prevention organisation (under the leadership of Bill Trueman) which helps banks, corporates, insurance companies, telecommunication sector, and other organisations investigate, detect and prevent fraud to save millions.

When serious Corruption, Fraud or Illegal activities are exposed in Corporate or an organisation, should the Top Dog resign, even if they allege they were unaware of the offences?

Should Top Dogs Resign When any Scam or Fraud takes place in an Organization?

“Yes but not always…. life is never that simple! Even if the ‘top dog’ doesn’t set the fraud agenda, and has no prior knowledge of the corrupt or fraudulent practices, they still have to go as there is always an assumption of responsibility at the top. However, a good leader will make sure that their business team has fraud prevention tools, such as payment, audit and stock controls et. al. in place. Thus, the good leader should rarely see and experience such corruption or fraud. However. If the leader does not drive such disciplines into the business, then their leadership is poor AND he or she MUST go if that leadership comes under scrutiny when any business fraud or company fraud is discovered.

The biggest exception to this rule include; new leaders, who are trying to implement the right infrastructure, which will always take time to put in place. The judges in these cases must be independent non-executive directors, chairmen or shareholders; who should always also be in place in a supervisory oversight role.

Sometimes culpability stretches much further than ‘the one at the top’, and could include a broader base of stakeholders – shareholders etc  The Ministry of Defence might well see one of the causes for losing over £6bn as potentially the result of a very large company fraud, but we’d never hold the Queen liable…would we?”

UKFraud is an independent fraud prevention agency (under the leadership of Bill Trueman) working globally, which helps businesses, banks, corporates, insurance companies, telecom sector, ngo, and other organisations investigate, detect and prevent fraud(and corruption) in order to prevent losses and save millions.