Tough economic conditions could be fuelling commercial crime in SA

Commercial crime is on the rise in South Africa, as many people seek to maintain their lifestyles amid tough economic conditions.

This means that businesses need to be particularly vigilant and give serious consideration to protecting themselves against these risks.

Commercial crime refers to theft, fraud or dishonesty committed against a business by an employee that results in the business suffering financial loss.

“We are seeing high inflation, rising interest rates, as well as climbing fuel and food prices. The average South African is financially stressed and many people are becoming desperate,” says Gizelle Pereira, commercial crime product head at iTOO Special Risks.

“With tough times come long fingers. Once an employee breaches business protocols, it becomes easier for them to do it again and again. So, commercial crime can go undetected for a very long time, only for a business to discover that it has lost a huge amount of money when the crime is finally detected.”

According to crime statistics released by the SAPS for the second quarter of 2022/23, commercial crime increased by 19.9% year on year, with more than 28 000 commercial crime cases reported between October and December last year.

“Unfortunately, commercial crimes are very hard to prevent. Where there is a loophole, criminals will find it. You might have a business that you think will never be hit, but never say never,” says Pereira.

She notes that the South African market has been hard hit over the past 24 to 36 months, with many insurers turning away from actively pursuing the commercial crimes market segment altogether.

“This just goes to show that criminals have changed their tactics to stealing big amounts once off, instead of taking smaller amounts at a time. A big loss could put many companies out of business,” says Pereira.