New Delhi: Fifty-seven percent of all fraud in India occurs through online platforms and 26 percent of Indian organizations have lost more than $1 million A new report from financial advisory services firm PricewaterhouseCoopers (PwC) points to such scams.
report titled Platform: The new frontier of fraud in India was released last week and is the second in a series of reports titled ‘Platforms: The New Frontier of Fraud in India’. PwC’s Global Economic Crime and Fraud Survey 2022: India Insights’,
while the first part series One focused on all types of frauds and economic crimes suffered by companies, the other focused on “platform fraud” – the biggest source of fraud suffered by Indian companies.
The report describes ‘platform fraud’ as fraud perpetrated through online platforms, such as social media, enterprise and e-commerce.
The report is based on survey responses from 111 organizations across India, including industries such as technology, financial services, banking and capital markets, consumer products and retail, education, healthcare, hospitality and leisure, and industrial products and manufacturing.
According to the report, the turnover of half the companies was more than 1 dollar. Arab,
According to the report, fraud using online platforms has become more common since the Covid pandemic, when remote working, e-commerce delivery apps and contactless payments – all saw a rapid increase in their usage.
“Social media platforms connect us every day. E-commerce platforms provide access to goods and services. And enterprise platforms help companies interact with customers, process transactions and transfer funds”, the report said.
It added that Indian companies were more vulnerable to platform fraud than those abroad.
According to the report, on an average, Indian organizations operate five platforms in the normal course of business as against the global average of four.
“As a result, the incidence of platform fraud in India is very high,” Puneet Garkhel, Partner and Leader, Forensic Services, PwC, said in the report.
Common methods used in ‘platform fraud’
The most common examples of platform fraud experienced in India were unauthorized transactions, such as card payments, unauthorized transfer or deletion of data, and victim-initiated fraudulent transactions, the report said.
Introducing malicious software, or malware and ransomware, into enterprise platforms that a company uses for its work is another example of platform fraud.
Ransomware is malicious software that can used To encrypt the victim’s computer files, essentially locking the victim out of their system until a ransom is paid. Users trying to open files that are locked and encrypted by the ransomware will continue to receive a message demanding a ransom or showing an email address to contact the hacker.
Theft or cloning of the contents of a company device, as well as identity theft or taking over a company account without permission, are also described as a form of fraud in the report.
“Enterprise platforms are most likely to be the site of malware, phishing, money laundering and ransomware incidents. Ransomware, in particular, has evolved into a looming threat with the potential to cause catastrophic damage”, the report said.
The report notes that 44 percent of criminals commit fraud for financial gain, while 41 percent of platform fraud is perpetrated by “internal criminals.”
It found that 26 percent of platform frauds involved collusion between internal actors and external criminals.
“This implies that more than two-thirds of all platform fraud could be reduced if companies had strong internal controls in place,” the report said.
(Editing by Richa Mishra)