The actual or attempted payments fraud has resulted in relatively small financial losses whereas the company faces huge problem of public trust which is irreparably tainted, reveals the ASSOCHAM and Grant Thornton joint study.
The joint study on "Law & Technology: Evolving challenges as a result of fraud" released here today reveals about 39 per cent of organizations, the potential loss from fraud is estimated at less than USD 25,000, while for 37 per cent of organisations, the potential loss is between USD 25,000 and USD 249,999. The potential loss is USD 250,000 or more for 17 per cent of organisations.
Many businesses are feeling the effects of the economic downturn and in their attempts to minimise losses, often they unknowingly open themselves to huge financial and reputational risks. This is due to the fact that when companies cut back on costs, they often increase their chances of being victims of fraud, adds the joint study.
As the popularity of internet shopping and online auctions grows, so does the number of complaints about transactions. Some of the most common complaints involve: Buyers receiving goods late, or not at all, Sellers not receiving payment, Buyers receiving goods that are either less valuable, than those advertised or significantly different from the original description, Failure to disclose relevant information about a product or the terms of sale, reveals the ASSOCHAM- Grant Thornton joint study.
There are several avenues of risk associated with each and every process. From a risk perspective, E-Commerce companies could face issues around brand risk, insider threats and website uptime. Issues around employee-vendor nexus, bribery and corruption make companies vulnerable to fines. Cyber security also raises some concerns around website exploitation by external entities, highlighted the study.