White collar crime on the rise in Hungary
New report shows white collar crime on the rise in Hungary
According to an international survey conducted by PricewaterhouseCoopers, up to 62% of Hungarian companies were the victim of financial crime during the previous two years. The number of companies that experienced white collar crime more than doubled during this period, so that Hungary is now above the EEC and global averages, (50% and 42% respectively). The fourth edition of PWC's biannual survey contained responses from over 5400 companies in 40 countries.
The average number of crimes per company over the two year period was nine, and of the Ft 4 billion in damages caused, Ft 1.5 billion was due to theft and improper use, Ft 1.4 billion due to corruption and bribery, and Ft 185 million due to misuse of intellectual property.
Other expenses related to economic crimes were costs of lawyers and investigations, which total Ft 833 million. These crimes also harmed the brand name and stock exchange valuations, impacted relations with consumers, investors and business partners, and lowered employee morale. On average, companies only received compensation for 13% of damages.
Nine out of 10 white collar criminals are men, most of whom are between the age of 31 and 50. According to the study, the reason for the low number of female perpetrators is that women are still underrepresented in leading business positions.
Punishment for such crimes is light, with three-fourths of those caught receiving a sentence of less than three years. Most perpetrators hold a higher education degree, 27% of them are top management, while 20% are middle management. "Managers typically get a temptation within two years of their appointment," the study writes. As they are in influential positions, culprits often have the opportunity to avoid controls set up to prevent these crimes. Of the perpetrators, 34% were employed by the business in question, and in 90% of crimes, outside accomplices were also involved. 30% of all cases were discovered accidentally or the culprit was turned in.
Despite this, 82% of companies do not believe they will be a victim of white collar crime within the next two years. Local PWC director Miklós Fekete said that while his firm offers services related to catching white-collar crimes, like their work alongside the FBI in the United States, local law enforcement authorities have yet to utilize these services, most likely due to the costs involved.
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