Survey about white-collar crime

29 April 2014. The firms were selected in a random sample of 8,180 companies. The survey was funded by the Swiss National Science Foundation. Professor Killias started it at the University of Zurich and completed in at the University of St.Gallen. Its results are as follows:

Victims of crimes
A total of 24% of the surveyed firms indicated that they had fallen victim to employee crimes at least once in the previous three years (2008-2010). Within the last two years, this figure was 18%. This is far less than the 37% recently published in Pricewaterhouse Cooper’s (PwC) Global Economic Survey 2014. The PwC study is based on a survey of a mere 83 firms. This is most likely to be the reason why the PwC victim rate fluctuates between 17% and 37% from year to year.

Big differences are revealed by the Swiss Business Crime Survey with regard to the victim figures of the various economic sectors. Thus exactly 25% of trading companies, but only 7% of finance companies fell victim to at least one employee crime between 2008 and 2010. In the last year, 14% of trading companies and 2% of finance companies were affected by this.

Perpetrator profiles and motives
In the financial sector, it was revealed that the perpetrators tend to be Swiss nationals, male, between 31 and 40 years of age, with completed vocational or other professional training, married, in employment by the firm in question for one to three years, and with an annual salary exceeding CHF 100,000. According to the survey, fraud and unfair competition are most frequently committed by male employees, whereas in the case of theft, the perpetrators are most often single women with an annual salary of CHF 50,000-75,000. Unfair competition is more likely to be the province of managers with an income exceeding CHF 150,000. They are more educated and older than those who commit fraud or theft.

Preventing offences

96% of finance companies and 94% of trading firms took measures for the prevention of criminal offences. The most frequent prevention measures taken by the former are aids in the field of computer security or software (69%) and the “four-eyes principle” (64.1%). In shops, tokens of gratitude to employees are considered to be a preventive measure (50%), as are clear and simple communication channels (48%). 41% of finance companies and 47% of trading firms implemented new preventive measures after they had fallen victim to a criminal offence.

The interviewees regarded regular checks and audit systems, transparent human resource policies, clear employee guidelines and the systematic vetting of new employees as early as the application stage as the best strategies. Firms with a corporate culture based on loyalty and tradition are less likely to use physical and computer security systems to check on their employees.

Survey results concerning corruption

3% of all shops and 1% of finance companies were victims of employee corruption between 2008 and 2010. The most frequent and significant case of corruption in the finance sector concerns employees who are planning to leave the firm to set up a business of their own and who bribe clients in the hope that these might follow them. The banking sector mainly registered passive corruption: employees accepted improper favours from third parties, to the detriment of the bank.

These cases were taken very seriously because of the risk for the bank’s reputation and because of financial consequences. In the trading sector, corruption mainly concerned favours granted by or to competitors, suppliers, customers and employees. Five out of eight perpetrators in the trading sector were not Swiss nationals, which indicates that corruption is more likely in international business transactions.

Corrupt practices in international trade

The survey mainly considers domestic cases of corruption. What has largely been unexplored to date is the way in which Swiss firms experience corruption in international business activities. The Research Institute for Legal Sciences is conducting a survey on Swiss firms’ proneness to corruption at present. This project is intended to supply findings about how Swiss firms experience the contradictions between the strict anti-corruption standards in western countries and the corrupt practices that are widespread in other countries.

Photo: Photocase / Marcel Drechsler