Three-quarters of tourism, transport and leisure companies worldwide have experienced a fraud in the last year but the industry risks being complacent, according to a new global fraud report.
The 2015 Kroll Global Fraud Report shows the most common type of fraud in the sector this year was vendor, supplier or procurement fraud, experienced by 20% of leisure and tourism companies, higher than the report’s average of 17%.
This was followed by theft of physical assets or stock, at 15%, and corruption or bribery, at 15%, the third highest rate of corruption in the survey. The industry has the smallest incidence of regulatory or compliance breach with only 7% of companies affected.
Three-quarters of those who responded to the survey said their exposure to fraud has increased this year, with the biggest drivers of increased exposure to fraud said to be high staff turnover, according to 32%, and entry to new, riskier markets, cited by 15%.
According to the report, the industry has a “very average fraud problem”, with the number of companies affected by at least one fraud (75%) the same as for the survey as a whole, but “is acting as though it has a smaller one”.
The industry is less likely to plan investment in anti-fraud tactics such as background screening and partner or supplier due diligence compared to other sectors, according to the report.
It states: “What sets apart the sector from the norm is that it is less likely to be planning to enhance efforts to fight fraud in the year ahead.”
For nine out of ten anti-fraud strategies covered by the survey, executives in the transport, leisure and tourism industry are less likely than those in other sectors to invest. The only exception is in general risk management, in which 31% plan to invest.
The chairman of Kroll, Tommy Helsby, said: “Fraud is not going away and continues to be on the rise, but the well prepared business can do much to stay one step ahead and be positioned to eliminate or mitigate it.”