The Rise of Payment Fraud: Criminals Cause Greater Damage to Companies

KCriminals are increasingly causing greater damage to companies. According to claims statistics from credit insurer Allianz Trade, the number of cases of payment fraud increased by 29 percent in 2022. The resulting damage even increased by a third.

The perpetrators use various fraud schemes to funnel money into their own pockets or instruct employees to pay out large sums of money by pretending to be bosses or managers.

Allianz expert Rüdiger Kirsch also sees the spread of home offices and artificial intelligence as current and future drivers of this disastrous development. According to Kirsch, new AI applications will make it even easier for fraudsters to strike the right tone and manipulate employees.

Men in their mid-40s belong to the risk group

According to Allianz Trade, perpetrators from among employees cause the greatest damage. They were responsible for 57 percent of fraud and 73 percent of damage in 2022. According to statistics, the greatest damage was caused by well-trained, male managers who were around their mid-40s and had worked in the affected companies for at least 10 years.

What makes it more difficult to discover white-collar criminals in the company is that most of them have not previously been noticed as criminals, so they appear to have a clean slate. According to the lawyer and criminologist Hendrik Schneider, this is because, as a rule, only people with a perfect police record get into responsible positions where they can exploit their insider knowledge and authority to enrich themselves at the company’s expense.

Of course, not everyone becomes a criminal just because their position or lax controls give them the opportunity to commit fraud. According to experts, there are usually other motives, such as a financial emergency, greed or peer pressure.

In addition, many white-collar criminals also need a supposed justification for their actions. Some people gloss over the fraud as compensation for their self-sacrificing work for the company or their low pay. Or they argue that it doesn’t hurt anyone if some money disappears from the till in a large company.

Even cloning voices becomes possible

Recently, in addition to perpetrators from inside a company, attackers from outside are increasingly attacking. According to Allianz Trade, external perpetrators are catching up in terms of the number of cases. The long-known method of pretending to be a boss in order to use pressure and compliments to get subordinates to transfer large sums is experiencing a renaissance. Damage caused by false bosses increased by 38 percent.

Allianz Trade warns that new technologies could soon help fraudsters make a dangerous quantum leap. For example, experts have tried freely available software for cloning voices – with fascinatingly frightening results. In addition, with the help of artificial intelligence and ChatGPT, perpetrators could increasingly easily create emails that appear deceptively real by feeding their algorithms with company texts from the intranet or social networks. This allows you to automatically formulate emails in the typical boss style, which fewer and fewer employees become suspicious of.