This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our PRIVACY POLICY for more information on the cookies we use and how to delete or block them.
  • 1 in 5 companies have
    experienced fraud this past year

1 in 5 companies have experienced fraud this past year

13 November 2018

Study BDO: Belgian companies lose 150.000 euro per fraud case  

One in five companies in Belgium have experienced fraud in the past year. On average companies lose 150.000 euro per incident. In 2% of the fraudulent cases the loss can amount up to 1 Mio euro, as shown in a study executed by consultancy firm BDO Belgium, assessing the impact of fraud within Belgian companies.

.

Companies that have never been a victim of fraud or were never exposed to an attempt, have become the exception in Belgium.  Only 23% of Belgian companies have never been confronted with fraud related incidents. Meaning they did not lose any money through fraud, nor detect any attempt either.   Remarkable: In Belgium, large companies are equally affected by fraudsters as smaller companies.

Cédric Antonelli, Partner Forensic & Litigation Support at BDO Belgium: “Fraudsters do not make a difference between large or smaller companies.  Today, each type of company will face some form of fraud.  And the fraudsters do not make any distinction between small or large companies in terms of the techniques they use.”

1 in 3 fraud cases is a fake invoice                                        

Despite of the increasing digital world, hacking is not the most popular way to commit fraud.  The classic fake invoice is still the most common method of fraud, due to its simplicity.  15% of the surveyed companies indicate that at least one fake invoice has been paid in the past 5 years.  If they only look back at the past year, 7% indicate to have been the victim of this technique.  The embezzlement of corporate assets takes a second place, cybercrime completes the top 3.  

Cédric Antonelli of BDO: “In the future, cybercrime will only become more popular to commit fraud. It is an efficient way with little cost for the fraudsters.  Moreover, companies that become the victim of fraud are often reluctant to admit it.  It does not only cost the company a lot of money, it also damages its reputation.  ”

Company losses of 100.000 euro to more than 1.000.000 euro

The economic losses of fraud are significant.  In 70% of the detected fraud cases the company losses are less than 100.000 euro, but with CEO-fraud, where someone - using e-mail - will pretend to be the CEO and gives payment instructions, the losses can amount to up to 350.000 euro per case. In 2% of the cases the economic damage can be more than 1.000.000 euro, according to the BDO study. Not to mention the indirect costs a fraud incident entails.  

Cédric Antonelli: “The direct costs per fraud incident through cybercrime amount on average to 94.000 euro. But if we look at the additional costs cybercrime causes, it will quickly lead to double that cost.  Just think about the interruption of business activities or reputation damage.”
 

Only 1 in 4 companies has a budget to counteract fraud

Yet only 24% of the companies indicate to have a specific budget to counteract fraud.  Those companies that did put aside a specific budget, mainly use it for internal audits and IT-security.  On average Belgian companies spend 60.000 euro per year in their combat against fraud.  For 2 out of 3 however, the amount is lower than 50.000 euro. For 10% the budget can increase to 500.000 euro. Large companies clearly invest more than smaller companies in fraud prevention. 

Cédric Antonelli: “It is important to invest in technology to tackle fraud.  But it is even more important to invest in the company staff.  Manual checks are still the best way to expose fraud (attempts).  An active role of the company management is crucial: 27% of the attempts to commit fraud were uncovered by manual checks and 10% of the actual fraudulent cases were thus exposed.”

About the study

BDO collected the answers of 245 companies active in Belgium, in 33 different sectors. All companies have a turnover from 5 Mio euro to more than 500 Mio euro.   The study was executed by an external agency, commissioned by BDO, in May 2018. You can download the report here: advisory.bdo.be/fraudsurvey