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The Impact of Crime on the Private Sector and Business
Transcript of The Impact of Crime on the Private Sector and Business
design by Dóri Sirály for Prezi
"The private sector is the part of a country's economic system that is run by individuals and companies, rather than the government. Most private sector organizations are run with the intention of making profit."
- Shop lifting/ Theft
- Cyber crime
- Corporate crime/White collar crime
Different types of crime affecting the private sector
Impact of Shoplifting/Theft
"Crimes carried out by means of computers or the internet"
(includes hacking, viruses, phishing, spamming and identity theft)
Impact of Cyber Crime
34/43 English and Welsh police forces reported an increase in shoplifting by around 6% a year (2014)
Shoplifting represented the biggest problem to UK retailers, accounting for 36% of total losses, or £1.224bn. However, theft by employees was also a major concern, accounting for 33% of the overall figure. (2013)
Small businesses lose approx. £13,500 per year, each, from shoplifting
Over 2/3 businesses are victims of crime
Retail generates 5% of UK GDP
Highest rate of shop theft for over 9 years (retail crime survey 2013)
Direct cost of retail crime- £511 million (retail crime survey 2013)
1/10 shop thefts reported to the police in 2012
Theft of a $2.00 item from a store operating on a 10% profit margin requires the sale of $20.00 in merchandise to make up for the loss. Supermarkets and other retailers operating on low margins of 1% must sell $500.00 in merchandise, just to cover the cost of a $5.00 stolen item.
Loss prevention very costly
Doesn't just impact the business: it is estimated that every consumer in the US and Canada pay's a minimum of $250 each year because of crimes against merchants.
Across 6 countries and 234 multinational companies, nearly all had been victims of a malware attack and 57% experienced distributed denial of service (DDoS) attacks. (Ponemon Institute report 2013)
Companies were breached 1.3 times a week at an annual cost of around $7.2 million. (Ponemon Institute report 2013)
February 2014- credentials for 360 million accounts and 1.25 billion email addresses leaked in data breach- result of attacks on Google, Yahoo and Microsoft- to name a few. Included a haul of nearly 105m records.
Cyber Espionage "The greatest transfer of wealth in history"- Director General of the US National Security Agency, Keith Alexander.
Over £270 billion- cost of cybercrime globally.
£18 billion to £27 billion a year- estimated cost to the UK.
54% of total cyber attacks targeted the US- 2013. Nearly half originated in China, followed by the US (19%) and Canada (10%)
Impact: loss of business intelligence and intellectual property, increased security costs, disrupt workflow and damage business' reputation.
Companies that report major cyber attacks suffer a 1-5% drop in stock value.
Impact of Corporate Crime/White collar crime
"Any criminal activity for financial advantage that occurs during the course of business"
Includes: Embezzlement, Healthcare fraud, Ambulance services, Insurance fraud, Mail fraud etc
Endanger employees through unsafe working conditions, injure consumers because of dangerous products, cause problems in the community.
One of the fastest-growing types of crime in the world
Forgery and fraud is costing Britain £14 billion a year
Businesses benefiting from crime
Private security services, surveillance, alarm and CCTV equipment providers, private prison companies
Corrections Corporation of America (CCA) saw revenue increase by more than 500% in the last 2 decades
In 2012 CCA offered 48 governors to buy and operate their state-funded prisons, the offer had an "occupancy requirement"- a clause requiring the state keep the prisons 90% full at all times
42/62 contracts for private prisons operating in the USA at local and state level included occupancy requirements that the prisons must be kept between 80-100% full
In 2002 the Premier Custodial Group, the UK's largest private prison operator's combined turnover for all prison and correctional services contracts was £127.4m
Case study: London Riots
Compensation claims covering damage and loss totaled to £200-300m
£74m = Policing costs in London
1/4 of businesses closed early during the riots
1/4 of businesses added security during the riots.
Financial losses to businesses were £10,000- £15,000 at the lower end, averaged at £50,000-£100,000 and were between half a million and a million pounds at the upper end.
83% businesses believe the riots damaged London's reputation