COVID-19 & Behavioral Fraud
Economic crime tends to surge during and following a recession.
With respect to the 2008-2009 financial crisis, a study by BDO suggested that the amount of money lost through fraud jumped from an average of 4.57% before the crisis to an average of 5.47% during and after the crisis.
Financial pressures and pressures on individual performance are greater in businesses under stress and where individuals’ livelihoods are at stake.
The disruption faced by businesses and, in particular, the bulk of employees working from home presents greater opportunities for potential fraudsters
In difficult economic times the capacity for individuals to rationalize their actions increases. For instance, individuals might consider that, given the extraordinary nature of the current crisis, they are entitled to ‘bend the rules’.