If the Police Are Away, Will Fraudsters Come Out to Play?
The Impact of Police Cuts on Corporate Fraud
Many of you will have seen the recent report by the National Audit Office setting out that Central Government funding to police in England and Wales has fallen by 30% leading to reduced manpower and fewer crimes resulting in charges or summons. Could this be yet another blow to the fight against fraud?
The perception amongst both employees and employers that the police may divert any resources to “real crime”, that is, those against people and property rather than “victimless crimes” such as fraud, is certainly plausible.
Given uncertain times, employees are often driven to commit fraud against their employer. The “fraud triangle” theorem suggests that there is a higher chance that an employee will commit fraud if two or more of the following factors are in play:
- Pressure: Most individuals require some form of pressure to commit fraud (e.g. money problems, divorce, gambling debts or overwhelming medical bills). Greed may also play a part.
- Opportunity: An opportunity to commit the act must be present. In the case of fraud, usually a temporary situation arises where there is a chance to commit the act without a high chance of being caught.
- Rationalisation: The individual is able to justify the fraudulent act (e.g. they did not get a pay rise or a bonus but thought they deserved one).
So if there’s a reduction in police numbers and charges being brought, many could see this as an opportunity and believe there is a low chance of being caught.