It's like a shitpost from Reddit.
It alludes that fraud will happen from disgruntled employees laid off from this business cycle. But it has no proof nor examples nor numbers to prove anything.
Layoffs Create a Vacuum for Fraud
21–26 of 26 posts
Re: Layoffs Create a Vacuum for Fraud
#22While this article is pretty hand-wavy, there are some interesting trends that do arise in fraud during a downturn. I do not fully know what drives it but I suspect the following:
* With more people being laid off, taking pay cuts etc. and with their sources of income drying up, they may be forced to find easier avenues to making money - especially if they have nothing to lose.
* Credit companies begin to tighten the lending limits, again forcing people who may have been on the fence, to look into committing fraud.
* Someone who genuinely is unable to pay off their credit card/loan or is worried about their job in a recession, might be tempted to claim unauthorized charges in order to not impact their credit scores - this would be first party fraud.
Insiders would absolutely know the lay of the land and how to perpetrate fraud without being caught. There will definitely be more disgruntled employees during a recession but I am skeptical of the scale of fraud being mentioned in the article. I am unconvinced that they would put their reputation and future employment on the line for short-term illicit gains.
In a strange way, we also do see a lot of fraud during a booming economy (something that another comment mentioned as being contradictory). The economy is flush with money -> companies are in growth mode and are rarely checking to see how many of their signups are from compromised identities -> the situation is ripe for third-party fraud and referral abuse.
Source: I work in Fraud risk management
Re: Layoffs Create a Vacuum for Fraud
#23This article is exceedingly vague. What is the point of this article, exactly? To scare corporate executive teams? To have something to point to when something inevitably goes wrong? Yes, there are mercenaries and opportunists in any economy... but writing some vague critique of opportunists doesn't make you smarter or better than them.
Agreed. The article fails to provide evidence that the increase in fraud is significantly changed by layoffs.
There are always people who are going to attempt to game systems.
There are people who work for business and that learn about systemic loop holes.
And there are also a percentage of people who when laid off with go on to exploit those systemic loop holes.
But at what percentage? How many frauds per million layoffs?
I cannot imagine how this would be a concern when determine the cost of a layoff.
Re: Layoffs Create a Vacuum for Fraud
#24One thing I don't see talked about much is the move to remote. I think it could potentially enable fraud. Far easier to wall people off and control what the information they receive.
I don't think it should effect to move to remote, which I'm in favor of. I just thought it was an interesting idea. Scams often rely on this kind of thing anyway. You have to control what various people see, and it might be a little easier with less people getting together to talk / gossip.
Re: Layoffs Create a Vacuum for Fraud
#25While this article is pretty hand-wavy, there are some interesting trends that do arise in fraud during a downturn. I do not fully know what drives it but I suspect the following: * With more people being laid off, taking pay cuts etc. and with their sources of income drying up, they may be forced to find easier avenues to making money - especially if they have nothing to lose. * Credit companies begin to tighten the…
I used to work for a startup that does ML for detecting payment fraud. Our untested theory was that the industry should be fairly recession-resistant because fraud increases in recessions, and fraud-prevention has measurable ROI, so you're probably not considering cutting back on it.
What'll be interesting is the meta-fraud of claiming false chargebacks or what the new fraud looks like because the shape of fraud is changing, and the model wouldn't have seen as much of it.
Re: Layoffs Create a Vacuum for Fraud
#26I recall that in the wake of the end of the Cold War, the US began hiring former Soviet nuclear/bio/chem weapons experts to prevent them from selling their services to various regimes. This could be a good time for govt and military to scoop up talent, tuis time in crypto and other new fields.