by Louise Gannuch 

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Last updated on 7/9/2020

As COVID-19 continues to affect individuals and business operations around the world, there have also been changes impacting the fraud landscape. Remote working environments, workarounds, and temporary solutions are just some of the changes that have created opportunities for fraudsters to take advantage of the disruption. However, the three factors that create favorable conditions for fraud – pressure, opportunity, and rationalization remain the same; they may just manifest in a different manner during chaotic times.

To explore the impact of the coronavirus on fraud, the Association of Certified Fraud Examiners (ACFE) is conducting a series of benchmarking surveys. Below is a summary of the top fraud schemes based on the data from Fraud in the Wake of Covid-19: Benchmarking Report:

Top five fraud schemes currently observed due to the coronavirus:

1. Cyber fraud
2. Fraud by vendors and sellers
3. Payment fraud
4. Healthcare fraud
5. Identify theft

Top five fraud schemes predicted to increase through May 2021 due to the coronavirus:

1. Cyber fraud
2. Fraud by vendors and sellers
3. Payment fraud
4. Healthcare fraud
5. Insurance fraud

While the information above is concerning and fraud schemes will likely continue to shift and develop, there are actions that your organization can take today to mitigate the risk of fraud and/or reduce the impact if fraud has already occurred. If you haven’t already, consider revisiting or developing the following:

• Conduct a fraud risk assessment to identify the ways in which your organization may be vulnerable to fraud;
• Identify temporary or newly-implemented modifications to your “normal” processes and establish monitoring processes;
• Analyze the data that is available in your organization, which may include anomaly detection or predictive analytics, and investigate as needed;
• Train and empower your employees to report fraud through hotlines or communication channels appropriate to your organization; and
• Test and strengthen your technology infrastructure and cybersecurity.

Related Article: Elements of Internal Control

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