"With increasing consumerism, there is a shift from the 'need' to 'greed' as a motive for committing fraud," E&Y report said
Rising consumerism has resulted in middle-level executives indulging in frauds to support lifestyle needs, a survey said.
"With increasing consumerism, there is a shift from the 'need' to 'greed' as a motive for committing fraud," consultancy firm Ernst & Young India says in the report titled 'Fraud and corporate governance: changing paradigm'.
In an increasing number of cases, it has been found that corporate frauds are being committed by younger employees to "support a lifestyle that is not commensurate with their incomes", says the report, adding "this appears to be in line with the increasing consumerism in the country".
Typically, a fraudster is a very ambitious mid-management employee, far from retirement, working in the procurement or sales department, it said.
Apart from banking and financial sector, which is perceived to be more vulnerable, other sectors such as infrastructure, IT/ITES and consumer products also have seen a significant increase in incidence of frauds, it said.
Nearly three-fifths of those polled for the survey said their companies have been subjected to fraud during last year.The growing use of technology has led to a jump in instances of technology-led fraud. "A proactive approach to fraud risk management is the need of the hour. Technology and a robust whistle-blowing mechanism can play a large role in mitigating these risks," E&Y's partner Arpinder Singh said.
In the NESA circle, Airtel has entered into partnerships with Subway and Baskin Robbins , among others, who are accepting payments via airtel money
Telecom major Bharti Airtel has tied up with over 60 brands and merchants in the North Eastern states for its recently launched nationwide mobile wallet service -- 'airtel money'.
In the North Eastern States and Assam (NESA) circle, the telecom giant has entered into partnerships with Subway, Baskin Robbins and Curry Pot, among others, who are now accepting payments via airtel money.
"The national rollout of airtel money will fulfil a much required need in the marketplace for a mobile-based wallet service that provides customers with the ability to transact and transfer money at the press of a button," Bharti Airtel chief executive officer NESA George Mathen said.
Under the airtel money service, launched by the company through its wholly owned subsidiary Airtel M Commerce Services Ltd (AMSL), users can load cash on their mobile devices and use it to pay utility bills and recharges, shop at merchant outlets and make online transactions. The service is available across 300 key cities in India.
"We are confident that our customers across Assam and North East will see great convenience in subscribing to airtel money," Mathen said.
"The losses caused to the insurance sector are Rs30,401 crore which is 9% of the total estimated size of insurance industry in 2011," Indiaforensic report said
Indian insurance companies have borne a loss of over Rs30,000 crore in 2011 due to different kinds of frauds, a study conducted by Pune-based company Indiaforensic has claimed.
The study cited collusion between the employees of insurers and private persons, document falsification and manipulation in citing cause of death to claim insurance benefits, as some of the reasons behind these frauds.
"The losses caused to the insurance sector are Rs30,401 crore which is roughly 9% of the total estimated size of insurance industry in 2011," the report said.
The total premium income of the insurance industry, comprising life, non-life and health, is around Rs3.5 lakh crore, as IRDA data.
Indiaforensic conducts fraud examination, security, risk management and forensic accounting research. About 86% of the frauds occurred in the life insurance segment while 14% took place in the general insurance sector (which includes risk of loss to assets like car, house, accidents, etc), it said.
According to the study, in last five years the frauds in life insurance sector had more than doubled (103%) whereas the frauds in the general insurance sector rose by 70%.
A total of Rs15,288 crore (Rs13,148 crore in life insurance and Rs2,140 crore in general) was the loss borne by the companies in 2007. In 2011, the loss was pegged at Rs30,441 crore.
"The insurance sector is susceptible to various frauds in the country. There is an urgent need to have strict measures including setting up of a dedicated unit to detect and check frauds in the companies," said anti-fraud and money laundering expert Mayur Joshi, who is founder member of Indiaforensic.
The study said that insurers were defrauding the companies by not disclosing existing diseases by manipulating the empaneled doctor while applying for the policy.
Medical bills forgery is the most common scheme of frauds which affect the health insurance sector the most. In as many as 31% of the total falsified documentation schemes medical bills were the common target of the frauds by the external parties. "The second most common scheme of the frauds in the general insurance space is the non-disclosure of the facts. Travel abroad for the surgery without disclosing it or getting the damaged vehicle insured without disclosing the accident are some of the common schemes," the study said giving examples of frauds in general insurance sector. According to Ashish, a certified fraud examiner and investigator “there is a need to have fraud control units in insurance sector to check losses. The study highlights a worrying trend.”