Staying vigilant during COVID-19

It is important to keep in mind that everyone is vulnerable to fraud, regardless of the circumstances. Certain events, such as those we are currently facing as a consequence of COVID-19, heighten the risk of fraud.

The three main factors that increase the risk of fraud are:

  • Pressure
  • Opportunity, and
  • Rationalisation

It is fair to say that the economic and societal impacts of the COVID-19 crisis have increased the likelihood that all three of these risk factors can occur simultaneously.

Financial pressure has increased at this time for a large number of Australian professions and businesses. Working from home arrangements, and other practices that are outside the norm, can provide the opportunity for fraud. And, notwithstanding the significant personal and professional consequences of committing fraud, inappropriate conduct can be easier to try and rationalise when immediate livelihoods are at risk.

As you continue to alter your workplace practices to adapt to the changing climate, it is important that you consider how to protect yourself and your clients from fraud. We take this opportunity to ask that practitioners ensure that you have strong controls in place to minimise the risk of fraud, as well as an appropriate action plan if you do identify anything suspicious.

Not only can fraud significantly impact your business – it can also have major consequences for the reputation of the personal insolvency system as a whole. It is important that AFSA and practitioners work together to maintain the community’s confidence in the system.

If you have any concerns about suspicious activity, you can report these to AFSA via the tip off form at afsa.gov.au. At AFSA, we are continuously strengthening our monitoring of indicators of increased fraud risk.

It is also important to note that the COVID-19 crisis and its associated stresses may have an impact on the mental health of both you and your clients. The Insolvency Mental Health Awareness Program, designed specifically for practitioners, is available on the AFSA website. Free support and resources are also available from not-for-profit organisations such as Beyond Blue and Lifeline.

Thank you for your support and understanding during this challenging time.

Paul Shaw
National Manager – Regulation and Enforcement