Winners and Losers in the 2014 Corruption Perception Index

Every year, Transparency International (TI) asks the question, “which countries are the most corrupt?” In their highly anticipated Corruption Perception Index, TI gives us a look at what countries are moving in the right direction – and which ones are sliding backward.

In the “less corrupt” category, Scandinavian countries still rank high, while Denmark takes top honors. On the other end of the list, Somalia and North Korea tied for the dubious distinction of “most corrupt.” Close behind them are Sudan, Afghanistan, South Sudan and Iraq.

According to TI, the Corruption Perceptions Index is based on expert opinions of public sector corruption. Countries’ scores can be helped by open government where the public can hold leaders to account, while a poor score is a sign of prevalent bribery, lack of punishment for corruption and public institutions that don’t respond to citizens’ needs.

The scores of several countries rose or fell by four points or more. The biggest falls were in Turkey (-5), Angola, China, Malawi and Rwanda (all -4). The biggest improvers were Côte d´Ivoire, Egypt, Saint Vincent and the Grenadines (+5), Afghanistan, Jordan, Mali and Swaziland (+4).

One of the most interesting aspects of this year's Index, and one that is being heavily reported in the global media, is the status of China. Over the past year, the nation seriously ramped up its anti-corruption efforts – at least by all appearances – and took a strong stance against fraud, both within its borders and beyond. Unfortunately, though, its campaign is not yet moving the needle in a positive direction. As TI reports, China’s score fell to 36 in 2014 from 40 in 2013, despite the fact the Chinese government launched an anti-corruption campaign targeting corrupt public officials.

Good news for those doing business in Dubai: as reported in The National, UAE was ranked the “least corrupt nation in Arab world” in this year's Index. It's a strong placement, but it leaves room to grow:

The UAE has scored highest among the Arab countries but it still has a long way to go,” said Kinda Hattar, the regional coordinator at Transparency International. “In terms of national laws the UAE lacks a lot of legislation up to international standards,” Ms Hattar said. “There are limited access to information laws, no protection for whistleblowers, public officials are granted impunity and civil society is very weak. There’s also a lack of transparency in public sector procurement processes,” she said.

Canada was ranked 10th, the United Kingdom was ranked 14th. Japan was ranked 15th and the U.S. was ranked 17th. Russia was ranked a poor 136.

For the full rankings, visit TI's website at transparency.org/cpi2014.

With an Eye on Modern Business Risks, CRI Group Taps BSI for Training, Certification

CRI Group is proud to announce that we will engage UK-based BSI’s internationally recognised training and certification services to better help our agents remain positioned to address the changing landscape of business risk.

We have engaged BSI in order to receive certification in BS 102000:2013 Code of Practice for the Provision of Investigative Services, BS 7858:2012 Code of Practice for Security Screening of Personnel Employed in a Security Environment, ISO27001-ISMS Information Security Management and ISO 9001:2008 Quality Management.

Founded in 1901, BSI (also known as British Standards Institution) is the UK National Standards Body that works with thousands of organisations in more than 150 countries. BSI is accredited by 20 local and international bodies.

Adding new levels of expertise, and the certifications to match, will help us provide the highest level of service for their clients in all parts of the world.

Our engagement with BSI will help us keep our clients’ information safe and ensure that the processes and procedures we implement for them are efficient and effective. Most importantly, these standards serve as strategic tools and guidelines to help CRI Group tackle some of the most demanding challenges of modern business, including information security and developing professional codes of conduct for our clients.

CRI Group has a special focus on helping international and multi-national organisations in developing risk mitigation systems. These systems enable the organisations to remain compliant with national and international regulation while maintaining high standards of business ethics and behaviour.

This engagement is another step in our continued growth, global exposure and ongoing partnerships with the most influential business organizations on the planet.

 

Due Diligence Required: Big Data Can Mean Big Risk

Breaches involving “Big Data,” mass amounts of customer information most often associated with (but not limited to) large retailers or service providers, have upped the stakes considerably in terms of risk and liability issues. In spite of this, mergers and acquisitions among large corporations have continued to increase in our global economy.

Even before potential data theft became such a critical danger area for businesses, there were plenty of risks in acquiring new companies and partners: the threat of fraud, possible harm to reputation, unknown or hidden business practices. Yet the trend toward massive data thefts might represent the most significant risk factor of all. Do any of your partners handle sensitive client information – of their own clients, your clients, or both? Can you ensure that they have effective controls in place to protect their data, and yours?

If the answer is “no,” then you are putting your clients and your company at a significant level of risk. In one shocking case, Gap, Inc. reported that an “unnamed contractor” for the worldwide retailer was responsible for a data breach affecting 800,000 people. When a breach affecting U.S. government employees was revealed this summer, it was the result of an attack against a private contractor. Also, a medical center in Boston fired a contractor after patients' “names, addresses, and medical information, including what drugs they were taking”were posted to a public website by accident.

Naturally, it's not the small, private contractors who end up in the headlines in cases like the above. It's the affected corporations like the Gap who bear the brunt of their reputation being damaged. Also, companies seeking to avoid potential litigation will have to be able to demonstrate that they performed extensive due diligence on their contractors in an effort to avoid such a scenario. To not do so in this climate appears irresponsible at best and downright reckless at worst.

At CRI Group, our due diligence process is designed to find security shortfalls that even your third-party partners themselves may not be aware of. We understand that when you partner with a contractor, you are assuming much of the risk that their controls (or lack thereof) create for your clients and your business. That's why our experts leave no stone unturned in checking their systems, personnel, history and any past incidents to help you be fully informed and aware before entering a partnership.

The next time you seek to make an acquisition or enter into a partnership, ask yourself: How much do you really know about your potential partner? Would you be willing to risk your business on the assumption that they can protect their data – and yours?

Background Screening: Essential for Protecting Your Business

The job market is competitive. From crafting a resume, providing references and perfecting a personal image, prospective candidates will seek to put themselves in the very best light. Some of them, unfortunately, will take things too far.

Fraud can happen in the job market in the same way it affects business and government. At its essence, fraud is a deception committed for personal gain. So when a less qualified job candidate wants a position – and the money or prestige that comes with it – badly enough, they may be tempted to bend the rules.

That's what happened when an applicant tried to earn a position with one of our clients. This individual claimed to be a holder of a university degree. However, the client authorized CRI Group to conduct our local education verification process. Unfortunately for the job seeker, we contacted the university – and they reported that his degree was ‘fake and forged.’

His deception didn't stop there. The applicant also provided a reference letter, apparently signed by the university’s Deputy Controller of Examination (Dy COE) — confirming his education record and asking to re-check his record with the university. The letter was also fake, and the signatory was not, nor had ever been, the Dy COE of the university.

Even though he had been exposed as a fake, there was still more to discover about the applicant. CRI Group investigated his claimed BBA, which was a total fraud, as well. There was no conferment of said degree.

Just imagine if the company, our client, had not been diligent enough to authorize this background check. If someone would lie, create fake documents and fictitious references just to get the job, what would he be capable of once among staff? Such a question looms especially large when considering employees who would handle money or financial details, or be involved in the accounting department in any way.

There are some basic things that any company should keep in mind when looking to hire new employees:

  • Some job candidates will seek an advantage through fraudulent means
  • In certain cases, the hidden truth might even include criminal behavior
  • Always verify information provided by individuals you seek to hire

CRI Group's verification services probe deep into an individual’s background, checking employment, education, criminal history and other critical details. I invite you to read more about this valuable range of services at CRIGroup.com. Next time you hire new employees, don't risk letting them trick their way into your company.

Will Digital Payments Help Reduce Healthcare Fraud?

A timely article in the Guardian discusses a trend toward mobile payments and how it is changing the healthcare industry. Most notable for fraud fighters is what this new development could mean for protecting consumers. At its essence, digital currency helps to simplify the payment process and thus provides fewer opportunities for malfeasance. As the article states:

“...it is becoming increasingly apparent that digital payments in rural, remote areas settings are quicker, easier, and safer. The likelihood of fraud drops as fewer hands are needed to transfer the money. And the transaction costs decline, making it cheaper for providers to reach rural populations.”

The article provides accounts of three different locations where digital payments are making a difference in the delivery and availability of healthcare: Tanzania, Zanzibar and Pakistan. Obviously, the message is that this is positioned to become a worldwide trend. Fraud risk experts have to be hopeful on that point, as healthcare fraud is currently still a massive source of loss and damage to the economy.

No single governmental body collects and compiles information on healthcare fraud. But based on the numbers we do know, the scale of it is staggering. In the U.S., for example, the Justice Department secured $3. 8 billion in settlements and judgments from civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2013. Knowing that mot fraud still goes undetected, one can only guess at the total losses suffered not only in the West, but also in developing countries where controls are few and far between.

Healthcare fraud is a scourge not only because of its criminal nature. It also raises costs and impacts patients, providers and insurance carriers significantly. Awareness of this type of fraud is crucial, as it often involves collusion between multiple parties and can be more difficult to detect than other types of fraud.

As the Guardian reported, digital payment systems that are properly developed can help limit this type of fraud, at least at that part of the process. Any relief is welcome. However, it will be imperative that anti-fraud experts are consulted and assist with the implementation of such systems. Otherwise, they can carry their own fraud risk, as is the case with any digital system. Hacking, data breaches and other common methods of fraud will target such systems and security personnel will need to be trained and on guard to stop them.

Without a serious focus on isolating and reducing healthcare fraud globally, the problem will continue to spiral out of control.

CRI Group Once Again Joins Movement to Shine Spotlight on Fraud

International Fraud Awareness Week kicks off Nov. 16, 2014 worldwide

Fraud costs organizations worldwide an estimated 5 percent of their annual revenues, according to a study conducted by the Association of Certified Fraud Examiners (ACFE). If applied to the 2013 estimated Gross World Product, this translates to a potential projected global fraud loss of nearly $3.7 trillion.

The seriousness of the global fraud problem is why CRI Group will be once again participating in International Fraud Awareness Week, Nov. 16-22, 2014, as an official supporter to promote anti-fraud awareness and education. The movement, known commonly as Fraud Week, champions the need to proactively fight fraud and help safeguard business and investments from the growing fraud problem.

CRI Group joins hundreds of organizations who have partnered with the ACFE, the world's largest anti-fraud organization and premier provider of anti-fraud training and education, for the yearly Fraud Week campaign.

As a global supplier of risk management, forensic accounting, due diligence and background screening services for some of the world’s leading business organizations, CRI Group is uniquely positioned help raise awareness of fraud and push the goal of Fraud Week forward. 

At a time when fraud is greatly affecting businesses and hurting their bottom line, CRI Group excels at deterring, detecting and investigating such crimes. A business intelligence network in over 80 countries allows us to get local knowledge in places our competitors cannot.

We achieve success using a global network of professionals specially trained in investigative due diligence, financial crime investigations, counter fraud and counter corruption solutions and third-party risk management.

For more information about increasing awareness and reducing the risk of fraud during International Fraud Awareness Week, visit FraudWeek.com.

The 2014 Report to the Nations is available for download online at the ACFE’s website: ACFE.com/RTTN. The Report is in PDF format.