Travel hit by four-fold rise in fraud

The travel, leisure and transport sector has seen a four-fold increase in fraud in the past year, according to a global survey of 700 senior executives.

The study, commissioned by risk consultancy Kroll, suggests companies in the sector have each lost an average US$10.2 million to fraud over the past three years, four times the figure of £2.5 million for the three years to 2008. Only the retail, wholesale and distribution sector suffered a comparable rise in fraud over the past year.

The Kroll Annual Fraud Report was carried out by the Economist Intelligence Unit, which found five of the ten industry sectors surveyed had experienced a spike in losses because of fraud since the banking crisis and recession of the past year – the others saw a decline.

Overall fraudulent activity has remained flat, according to Kroll, with companies losing an average US$8.8 million over the three years 2006-09.

The travel, leisure and transport sector has fallen victim to a number of different types of fraud – with 47% experiencing theft of physical assets, 32% internal financial fraud and 30% suffering regulatory or compliance breaches. Almost nine out of ten companies in the sector reported fraud of some kind.

Just under one third of executives across the ten sectors said the economic climate had increased their exposure to fraud. Companies in North America experienced the highest incidence of fraud as a result of the financial crisis, but the Middle East and Africa saw the worst fraud levels overall. 

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