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Willis / JLT presentation Nov 2016

Fraud - The Current Climate

on 13 December 2017

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Transcript of Willis / JLT presentation Nov 2016

Emerging Trends Against Business
Phishing - (Emails)

CEO Fraud (Chief Executive Officer)

Employee Fraud (Internal)

3rd Party Fraud (Suppliers)
Public wi-fi
Not all public hotspots are password protected
Hackers use unsecure connections to infect your device with Malware.

Make sure you are indeed logging on to the
wi-fi network – E.G. CHECK WITH THE BAR / CAFE

Use a VPN service - i.e. 4G

Never configure your device to connect automatically to unknown wi-fi networks

Be careful what you access...e-mails, social networks, online shopping....WHY LOOK AT YOUR BANK ACCOUNT?

Social Engineering - What should we reveal?

Fraudsters make a career out of monitoring your data
Only 35% of people in the UK are following Government’s latest advice to use strong passwords made up of three random words. (GCHQ 2015)
The Current Fraud

An e-mail encouraging you to click on a link?
Spear Phishing - targets employees
Whale Phishing- targets high end users/executives and CEOs
Water holing- lure victims to compromised sites
Employee Fraud - Internal
Employee dissatisfaction - passed over from promotion
(selling information and stealing funds)
Blocking USB sticks from Laptops

Employees of insurers are in the unique position of fully understanding insurance processes and the triggers which may indicate insurance fraud

Lack of risk assessment and employees undermining weak internal controls (Customer Relationship Managers and Wealth Managers at high risk and high end funds) - KYC

No buy-in at board level and lack of responsibility when something does go wrong

OCG targets

Look for "life style change"
3rd Party Fraud
Matching Payroll to Expense ledger payments
Matching Next of Kin for pension nominees to Expense ledger payment names / addresses
Random dip sampling of expense payments i.e. lowering the threshold
Calendar of fraud
Fraudsters are aware of the "Year end crunch" - ACCRUALS
The Current Scale of the problem
2015/16 - National Fraud and Cyber Reports

Action Fraud - 234,000
Cifas - 325,000
Financial Institutes - 100,000
Currently over 1.4 million reports of fraud reported to Action Fraud
In excess of £44 million losses for Online shopping reported

Fraud and Cyber affects us all (Individuals & Businesses)

Offenders and victims from all demographics

80% of all fraud and cyber crimes are believed to be preventable
Bribery & Corruption
1. Culturally installed by the board - Get the tone at the top right
2. Resource the ABC activity
3. Under take a Bribery and Corruption risk assessment to understand the risks – take into consideration current and proposed business
4. Respond to identified risks and reports of Bribery in a proportionate manner
5. Embed ABC within current policies and procedures – not separate, reference it, it becomes a general part of every day practice.
6. Ensure effective ‘speak up’ process – do you have a confidential whistle blowing line? – do you staff feel protected if they were to call it?
7. Develop and deliver appropriate training to all those associated with the organisation,
City of London Police approved courses
8. Understand organisational liability under Section 7 of the Bribery Act 2010 (unlimited fine) -
With regular updates
9. Ensure to understand and apply due diligence to business associates – KYC – regular, they are who they say they are and their business – sanction countries.....
10. Understand that bribery is a significant financial crime risk and failure to have adequate procedures is a matter for the FCA (substantial fines)
Calendar of Fraud: Romance Fraud
Dating scams or romance scams are predominantly associated with online dating websites or forums, whereby victims are duped by fraudsters purporting to have genuine personal profiles
Once they’ve gained your trust, they ask for money for a variety of emotive reasons. It is a confidence trick where think you have met the love of your life online but they actually don’t exist and are most likely a criminal gang out to gain your trust and get you to send them money.

63% of victims are female, and the most prevalent age group is 40-59

The top five countries where fraudsters purport to be from are England, the United States, Nigeria, Ghana and the Russian Federation

UK public lost £34 million to ‘romance’ fraudsters in 2014

Over half of victims suffering from a severe or significant emotional impact on physical and financial wellbeing

Losses commonly vary between the £2,000 and £3,000 margins
Economic Crime is a growth industry
Identity Crime

Professional Enablers

Money Mules

Social Engineering

Consumer Behaviour

Virtual Currencies

Cyber Crime

Curent Picture:
Action Fraud Top 20 Crimes - 2015

Pensions Liberation

It is currently estimate that Fraud is 90% under reported

The latest estimations show fraud crime volumes of between 5 to 7 million. (E/W Crime survey 2015)
Under reporting by: Business (i.e. Banks) / Individuals.

Marsh recently put the cost of a single cyber attack at up to £20bn. - Reputation

Protect / Prevent Advice
CEO Fraud (Characteristics)
Someone is absent
Telephone call - followed by e-mail
Confidential transactions
Pressure situation
Empowering individuals
Cultural global challenge
What Bank is this?

Warning - please hover mouse before clicking
• The EU General Data Protection Regulation will help shape a Mandatory reporting requirement for data breaches on 25th May 2018
Neil Taylor &
Detective Chief Inspector Oliver Little

IFED - so far
1,600 suspects spoken to

Over 120 years in sentences handed down

£1.3 million in seizures, confiscations etc.

Awareness raised through quarterly days of action

Claimed and Shamed, sends the message to a prime time audience

Funding renewed and increased, allows IFED to develop output across all 4 P’s.

Piloting restorative justice with Home Office funding

Its not just insurance fraud

Organised crime groups use insurance fraud to raise money for other activities

Insurance is required to mask other criminality, including drugs and other commodity movements, anti social behaviour, burglary

Among Organised crime groups, the IFED brand is now known

Is It working? - Social Media Feedback!
Do Fraudsters get long enough sentences?
Bad Brokers
Good Brokers
PROTECT - strengthen the protection of individuals, communities, systems and infrastructure against fraud.

Industry will design-in crime prevention to their technologies and processes

Sharing intelligence

Know your customer – checks and strict front end controls

Counter fraud training for staff – constantly moving criminal tactics

Report to Action Fraud and refer to IFED !

IFED - What are we seeing?
Commission fraud - Brokering

Travel fraud - Claims farming

Medical invoice fraud

Payment fraud


Displacement impact

Full transcript