While we have braved the worst of the COVID-19 storm, it has also catalyzed unprecedented disruptions in the corporate world. From hybrid work structures to global talent sourcing, many stakeholders, ranging from workers to supervisors, were propelled into this new status quo.
Unfortunately, these same conditions have also contributed to an increase in white-collar crime.
A wide range of offenses, including embezzlement, fraud, money laundering, and bribery, are considered to be white-collar crimes.
White-collar crime is typically committed by people who hold positions of trust within an organization. These are people who have access to sensitive information or large sums of money. With many companies experiencing financial difficulties or exercising complacent security measures, there has been a temptation for some employees to commit white-collar crimes.
There are several reasons why white-collar crime is on the rise. Let’s look into a few of them.
1) Users are online for longer durations
The daily time spent by everyday Internet users is steadily increasing every year. Back in 2013, the average person spent 6 hours and 3 minutes online. In 2021, that number grew to 6 hours and 58 minutes, a growth of four minutes from the previous year.
While it may not seem like such a massive upswing, add all the global Internet users and that figure will mean that, collectively, users would be spending an additional 5 billion days browsing the web in that year alone. The COVID-19 pandemic has greatly contributed to this, as more individuals prefer doing once-physical activities like communicating with friends and shopping online. And as more people incorporate the internet into their daily lives, so will their vulnerability to online crimes increase.
But it’s not only the risk that’s heightened. As opportunities for fraudulent practices increase, so do the chances of someone taking advantage of them. In 2021 alone, the number of cyber attackers and data breaches has shot up by 15% from last year. While some cybersecurity measures have been able to control and contain the damage, it’s an ongoing cat-and-mouse battle as technology becomes more sophisticated and criminals get better at outsmarting even the most well-prepared systems.
With more cyberattacks taking place anonymously, it will also become easier for criminals to commit white-collar crimes without getting caught.
2) The rise of cryptocurrency and digital assets
Cryptocurrency has taken the world by storm in recent years, being recognised even in traditional financial institutions like banks.
In November 2021, Bitcoin, the original and most well-known cryptocurrency, reached an all-time high value of almost $70,000 per token. While the value has since dropped, the worldwide acclaim for Bitcoin and other digital assets has continued to make waves on news sites and social media.
The popularity of cryptocurrency is in part due to the unique, decentralized nature of blockchain technology, which allows for secure and transparent transactions. However, this very decentralization also makes it difficult to track down the source of any illegal activity.
For instance, for the whole year of 2021, the Federal Trade Commission has reported that over $1 billion have been stolen as an influx of new traders and scams related to digital assets have been on the rise. Cryptocurrency and NFT’s association with money laundering is nothing new either.
The targets for these scams aren’t just individuals. Cyber attackers have also targeted major crypto exchanges like Wormhole, draining over $320 million from customers’ wallets on the platform.
Cryptocurrency scams are not a new phenomenon, but they’ve been getting more sophisticated as the industry has grown. And with the value of digital assets continuing to rise, we’ll likely see even more white-collar crimes associated with this volatile industry.
3) Rise of crime in the workplace
From increased unemployment rates to inflation, the pandemic has increased the financial pressures on individuals, which has, in turn, led to an uptick in corporate crime.
One of the most common types of crime is invoice-related fraud, which is when a company fakes or alters invoices to receive payment for goods or services that were never delivered. This type of fraud can be difficult to catch, as the perpetrators often use real invoices from legitimate businesses.
Another type of crime that’s been on the rise is employee theft. Desperation and financial need can lead employees to steal from their workplace, whether it’s through embezzlement, time theft, or physical theft. And as many businesses have been forced to operate remotely, it’s become even easier for employees to commit these types of crimes.
4) Collusion within industries
White collar crime isn’t just limited to individuals. In some cases, it’s entire industries that are involved in fraudulent activities.
Cartel conduct is a loose term that describes anti-competitive behavior between companies, such as price fixing, bid rigging, and market allocation. Businesses seem as if they’re competing in the public eye, but they’re collaborating for their monetary gain. This drives up the cost for consumers and can have a major impact on the economy.
The legal areas of corporate crime, however, are still available to be invoked by businesses that have been linked to cartel activity. For instance, if two companies publicly participate in a joint venture, this won’t be seen as illegal under antitrust laws.
