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Fighting against fraud: Who and what are we actually fighting?
Globally, most of the fraudsters that were detected came from the low and mid-level ranks, and were also most likely to be punished.
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On trial: Former Udayana University rector I Nyoman Gde Antara (center) listens to prosecutors’ sentence demand on Jan. 23, 2024 during his trial at Corruption Court in Denpasar, Bali.
(Antara/Nyoman Hendra Wibowo)
F
raud undeniably remains a major threat faced by all organizations, and the quest for the most effective fraud deterrence is pursued relentlessly.
Public trust in organizations strongly, if not entirely, relies on how good their anti-fraud management systems are. Hence, technologies are capitalized, skills harnessed, and campaigns launched to pursue the commendable mission of fighting against fraud and corruption.
However, the recent United Kingdom Post Office Horizon scandal tells a different, terrifying story, a seemingly benign “fraud detection system” can, and did, turn out to be a cruel, appalling miscarriage of justice. Software, which was originally designed to replace paper accounts with electronic bookkeeping to reduce fraud, turned out to be faulty and caused more than 900 post-office workers to be wrongly accused, prosecuted and convicted of fraud since 1999.
This resulting destruction of hundreds of innocent people’s lives may be irrevocable despite compensation now being promised to victims, for years many have been stripped of their homes and livelihoods, their families’ lives utterly shattered, and some have even died by suicide.
For the sake of these poor victims, the scandal deserves more spotlight: it should reasonably force a reconsideration of whether the prideful slogan of “zero-tolerance of fraud” has really fulfilled the purpose for which it was supposedly intended.
The victims of the UK Post Office scandal may not be the only ones who have had to endure such lamentable injustice. Although the existence, and the exact number, of innocent people falsely accused of fraud remains largely unknown, the number of detections and imposition of sanctions are recorded. Globally, the 2022 Association of Certified Fraud Examiners Report to the Nations shows that most of the fraudsters that were detected came from the low and mid-level ranks, and were also most likely to have been punished.
By contrast, senior-level fraudsters among owners and executives are more rarely detected, and when detected are the least likely to be punished, despite accounting for the largest losses.
