Employee Fraud Accelerates during a Recession
Employee fraud is on the rise, soaring from $400 billion in lost revenue for U.S. businesses to over $600 billion. While many organizations have implemented background checks as a requirement for employment, the majority of employees who steal-68.6 %, according to Association of Certified Fraud Examiners-have no prior criminal record.
A study conducted by the University of Florida estimates that employee theft is the cause of about 48% of inventory shrinkage in business. That's equal to more than $15 billion per year. The study goes on to estimate that the average loss cost per employee is in excess of $1,300, which is significantly higher than the cost normally attached to individual incidents of shoplifting, which is just over $207. Consequently, businesses are forced to spend a great deal of time, effort and money on loss prevention.
Identity fraud decreased recently. Approximately 8.1 million Americans, or 3.5% of the total U.S. population, learned that they were victims of identity fraud. This crime affected 3 million fewer people than in the prior year. At $37 billion, the annual overall fraud amount was at its lowest point since the survey began.
Although the number of incidents of identity fraud has dropped and there are fewer victims, the remaining frauds are more difficult to detect and resolve, resulting in higher consumer costs. Average (mean) consumer costs were at $631, their highest level since 2007, although the median consumer cost remained at $0. Consumer costs are any out-of-pocket expenses suffered by the fraud victim, including unreimbursed monetary losses, and lost wages as a result of time spent to resolve the fraud as well as any related legal costs and credit monitoring costs.
Because of the zero-liability fraud protection offered by the majority of banks and card issuers, most victims will have to pay out-of-pocket expenses only to cover their time in resolving fraud, not to reimburse fraudulent charges. The average time to resolve identity fraud last yearrose to 33 hours, up 12 hours fromthe prior year. Resolution times are now at their highest point since this analysis stated when they were at 40 hours.