Does the Food and Agriculture Industry Really Need Commercial Crime Insurance?

Fraud by employees in any business sector, including food and agriculture, comes in many guises.  Invoice fraud can very quickly become costly to an organisation.  A member of staff who has control of tendering or contracts might conspire with a supplier to inflate invoices. Normally they split the difference between the ‘real’ price and the stated price. This means that either poor quality services are supplied, or overcharged services with reasonable quality are provided.  If the member of staff is allowed a level of autonomy in this area it can be hard to detect as they will often receive fake quotes to cover the fraud.  
 
Delivery fraud is another possibility and often works hand-in-hand with either blackmail or general corruption. A gang will find a suitable member of staff who has access to warehouses or other storage facilities and find a way to get them to aid them in their plans. This can be through a simple cut of the profits (Improper Financial Gain) or through blackmail. Either way the staff member will grant them access to the facility through either forged paperwork or being there themselves to open the door. Whole lorry loads of goods can be taken in this way and losses can mount up quickly. It is only when the goods are not paid for that the loss is discovered, which can often be some time down the line. Securing against this can be difficult as the papers to release the goods will be official and unlikely to be queried at the gate.  
 
More complex frauds are social engineering and fake presidents, which have the same method at their core. They both rely on a level of trust either built up over time or gained by electronic means. 
 
Social engineering can take the form of regular phone calls building-up a rapport, or targeted emails (finding out the hobbies of a member of staff and then sending them links – Spear Phishing), or even working on an out-of-work friendship which then turns into a request for help. All of these come under the social engineering banner. Once trust is established there will be a request to transfer funds, either for a legitimate looking reason or to help the person conducting the fraud. Once the money is transferred the contact usually ceases immediately.
 
Similarly fake presidents can fox even the sharpest of employees.  Criminals make a call seemingly from the CEO, CFO, or someone else senior in the business. It typically occurs on a Friday afternoon with a request for an urgent transfer of funds.  The reason given is usually that if the transfer does not go ahead then a deal will fall through to the harm of the company. The call will seem to come from the senior member of staff but will be the criminals who have hacked your phone systems to make it seem like it is the phone number of the person they are impersonating, or used email addresses which are one letter different to the senior employee.  A less sophisticated version of this is hijacking emails and changing bank details at the last minute to the fraudster’s account.