With the coronavirus economic crisis deepening, experts at University of Portsmouth are warning it will lead to the highest levels of fraud and cybercrime ever recorded.
There are also concerns that existing preventative measures need to be reviewed urgently because they are unlikely to be sufficient to deal with the heightened threat that comes from a deep recession.
Professor Mark Button, director of the Centre for Counter Fraud Studies at the University of Portsmouth, said: “Previous recessions show a direct correlation between a fall in economic output and a rise in fraud.” Professor Button has compared the UK’s past three recessions and mapped the growth in fraud offences as GDP falls:
Button said: “Recessions lead to increased financial pressures on more people and a small minority use fraudulent means to address such pressures. Respected economists* have predicted the current crisis could lead to a substantial reduction in GDP with lowest estimates of a 7.4% fall and highest estimates of a 35% fall by the OBR. These predictions could mean fraud levels increasing from at least 30.3% and possibly even doubling if the 35% fall was to occur. These are rough estimates, but illustrate that a substantial increase in fraud is likely as a consequence of the economic downturn.”
Button has teamed up with practitioners at Crowe UK. The company is at the forefront of fighting fraud and cybercrime for businesses and has produced guidance for businesses and organisations of all shapes and sizes. A copy of this guidance can be found here
Button added: “The deep recession we face, if typical of past economic downturns, looks set to lead to a substantial increase in fraud. Possible economic pressures may also lead people to radically re-evaluate loyalties and to rationalise behaviour which, in normal times, they would not consider appropriate. It is unlikely that any organisation will be immune to these changes. Organisations need to be prepared for this and I hope this guidance, that has been produced with leading practitioners from Crowe, will help them.”