A great article from our US colleagues - on the global issue of fraud in the construction industry and providing examples of what can go wrong. It's widely know that the Construction Industry is vulnerable to fraud and this is often attributed to the slower take up of information technology in this sector.
The real cost of fraud is hard to gauge as it is often copped on the chin and not reported by those impacted. However we encourage Companies to take a more open approach and prosecute perpetrators more often, to send the message that the construction industry will not tolerate fraud.
Contractors face risks to their businesses – and risks even in simply completing a project – that are many and varied. Contractors are very familiar with the threat of damaged equipment, injuries, lending disputes, unexpected change orders, weather delays and jurisdictional interference, to name just a handful. Contractors survive and thrive in the construction industry because of their ability to navigate such challenges. However, there is another form of risk many tend to overlook — fraud. Where Fraud Originates The critical role that contractors play in the construction process makes them a target from multiple directions. Contractors can be victimized by vendors, subcontractors, employees and investment partners and even other contractors.