New Zealand has jumped up global economic crime rankings for reported frauds but it appears businesses are not taking the threat of cybercrime seriously.
A PwC Global economic crime survey released this morning shows nearly half of the 93 New Zealand respondents said they had suffered fraud in the past year.
New Zealand has moved from eighth place on the economic crime rankings in 2009 (out of 54 countries) to fourth place in 2011 (out of 78 countries).
That places New Zealand in a higher position than Australia, the United States and the global average of 33%.
Compared with 2009 figures, the survey found almost all sectors experienced a rise in fraud, with the top three sectors in New Zealand being retail and consumer, energy and mining and government.
PwC forensic services partner Eric Lucas said that given the uncertain economic environment, the pressures and incentives to commit fraud had not declined since the 2009 survey. Instead, they appeared to have increased.
"This is the first time cybercrime has been included in the survey and is now New Zealand's third most reported type of economic crime."
The survey showed cybercrime was increasing. Criminals were becoming more sophisticated in their approach as they had identified how organisations had a reliance on technology and fraudsters were acquiring the technical skills to take advantage of low risk and high rewards, he said.
"Yet, the survey shows New Zealand businesses are not taking the threat of cybercrime seriously, with 39% of respondents saying they hadn't had any cyber security training in the past year."
Asset misappropriation was again the most prevalent form of economic crime in New Zealand at 75%, showing fraudsters simply wanted money, Mr Lucas said.
Of the New Zealand respondents who had suffered losses, 65% lost less than $135,000 but two respondents lost more than $6.7 million.
Despite the significant and ongoing threat, some businesses were reluctant to deal with perpetrators in a way that would deter future crimes, he said.
Fraud continued to be a persistent fact of business life in New Zealand and affected both large and small businesses. Organisations faced internal and external risks.
The survey found of the 39% who detected frauds after tip-offs, only 2% of those were reported through formal business channels, such as a whistleblower hotline.
Businesses needed to ask themselves what happened when the person suspected of committing fraud was also the person responsible for detecting it, Mr Lucas said.
Also, they needed to consider why just 21% of New Zealand organisations gave the fraudster nothing more than a formal "wrap over the knuckles".
The survey upheld New Zealand's image as one of the least corrupt places in the world with just 3% of New Zealand respondents saying they had suffered bribery or corruption in the past year compared with the global average of 10%, Mr Lucas said.
