The average loss for travel, leisure and transport companies to fraud has increased by 66% over the last three years due to the credit crunch, a report by Kroll has revealed.
Companies lost an average of $2.5 million to fraud in the past three years, compared to last year’s figure which stood at $1.1 million. The figures are a result of a survey risk that consulting company Kroll commissioned from the Economist Intelligence Unit of 890 senior executives worldwide.
Nine out of ten travel, leisure and transportation companies surveyed have suffered from corporate fraud in the past three years, up from 80% in last year’s survey.
Kroll’s business intelligence and investigations division senior managing director Blake Coppotelli said: “Although still far from the problem other industries face, fraud is growing in the travel sector and we expect to see this increase further as conditions become tougher for business and the full impact of the credit crunch unfolds.
“Companies need to look carefully at how they can address this issue now to reduce further risk to fraud and improve their business operations. Prevention is always better than cure.”
The most common types of fraud in the travel, leisure and transportation industry are theft of physical assets or stock (39%), management conflict of interest (30%), regulatory or compliance breach (30%), information theft, loss or attack (30%), financial mismanagement (26%) and internal financial fraud or theft (25%).
Various categories of fraud have seen a marked increase in activity during the past year including regulatory or compliance breaches (30%, up from 3%), information theft (30%, up from 18%) and financial mismanagement (26%, up from 18%).
A total of 890 senior executives took part in the survey. A third of the respondents were based in north and South America, 30% in Asia-Pacific, just over a quarter in Europe and 11% in the Middle East and Africa.