MUMBAI: White-collar crimes in India have seen a significant rise in recent years with fraudsters increasingly deploying newer technologies to evade detection. According to global audit firm Ernst & Young (E&Y), about 1,593 online frauds have been detected in India over the last three years and around 200 e-commerce companies are currently under the scanner of the Department of Industrial Policy and Promotion for engaging in potentially fraudulent transactions.
A white paper on the changing dynamics of white collar crimes in India released by the fraud investigation and dispute services department of E&Y states that the transformation from physical sales to the online platform has complicated the risk scenario, making modern e-tail more susceptible to white-collar crimes. Key issues include third party risks such as sale of counterfeit goods, collusion with employees, logistics fraud such as theft or diversion of funds, data security and supply chain fraud.
In the financial services sector, it said the white-collar crime could be in the form of identity theft, which means stealing personal and confidential information from an individual, without their knowledge to dupe them. This can be in the form of credit cards or bank accounts or even using false or forged documents. According to a survey conducted by E&Y, about 87 per cent of the respondents believe that the rise in non-performing assets (NPA) is due to the diversion of funds to unrelated businesses or fraud.
E&Y pointed out that the threats have become more complex over time, with fraudsters becoming savvy and sophisticated. Technology is changing the risk landscape and has been challenging the boundaries of white-collar crime. “The impact of white-collar crime on corporate India is significant. Today, fraudsters are motivated by greed and financial gain more than ever before, exhibiting deviant and exploitative behaviour,” E&Y said.
Some of the interesting trends that are emerging in white collar crime is that the average age of fraudsters are getting lower and they are using instant messengers and social media network instead of emails to evade detection. The typical perpetrators of such crime are individuals in position of trust who do not have a prior criminal record and believe that their act will go undetected.
