57% of all fraud incidents in India now 'platform' frauds: Report

About 57 per cent of all fraud incidents in India are now 'platform' fraud, a novel form of economic crime that involves fraudulent activities associated with social media, e-commerce, enterprise and fintech platforms, a report showed on Thursday.

More than 26 per cent of Indian organisations lost over $1 million due to platform fraud, and 44 per cent of the perpetrators were found to commit fraud for financial gain, according to PwC's second edition of 'Global Economic Crime and Fraud Survey 2022: India Insights'.

The findings showed that 99 per cent of fraud incidents in the past 24 months have been on platforms such as financial, social media, goods, enterprises, media sharing, knowledge sharing and services.

Economic crime and fraud continue to be a significant challenge for Indian companies, with 66 per cent of organisations experiencing at least one form of economic crime in the past two years.

"The emergence of and surge in e-commerce, contactless payments, home delivery models, remote working, etc., have not only led to various platform-based innovations but also opened avenues of entry for fraudsters," said Puneet Garkhel, Partner and Leader, Forensics Services, PwC India.

"Organisations need to be cognisant of these evolving threats and adequately invest in fraud prevention and detection strategies to safeguard themselves," he added.

Brand damage is another common motive cited by 32 per cent of the surveyed organisations, followed by competitive advantage at 21 per cent.

Enterprise platforms are a prime target for malware, phishing, money laundering and ransomware.

"The threat of ransomware, in particular, has grown to an alarming level. Financial frauds on transactions made to or from platforms accounted for 89 per cent of all platform frauds," said the PwC report.

Four out of every 10 platform frauds in India were conducted by internal perpetrators. Moreover, 26 per cent of platform frauds involved collusion between internal actors and external perpetrators.

"Fraudulent activity on platforms demands the involvement of executives and a cohesive approach that spans the entire enterprise, prioritising the ability to recover from adverse events," the report added.