White collar crime is a non-violent crime that happens in the world of business. It almost always has something to do with money. Some examples of white collar crime as a crime to business are bank fraud, hacking, counterfeiting, blackmail, bribery, tampering and manipulation of mobile phone use, tax evasion, money laundering, credit card fraud, investment schemes, kickback, insurance fraud, insider trading, embezzlement, currency speculation, forgery, and extortion. Even the act of adjusting a weighing scale to make more money in selling farm fresh goods is considered a white collar crime.
There are also different types of white collar crime schemes. These are the methods of perpetuating to crime to business by pretending it is legal. Hundreds of people around the world have fallen victims to these types of business schemes, many of whom fail to recover their investments.
The Advanced Fee – Demand for a fee before any transaction takes place except that the transaction is never consummated
Check Kiting – Issuing checks but withdrawing the funds before the checks clear
Coupon Redemption – Supermarkets, groceries and stores submit coupon to manufacturers although goods have not been sold
Ponzi –Solicits investors with promise of high returns and builds a network that eventually topples or the schemer runs away with the money
Odometer Fraud – Adjusting the odometer of used cars to charge a higher price. Another way would be to drive a brand new car around and then adjust the odometer.
Pyramid – Another investment scheme that is a perverted direct sales concept since no products are actually sold just franchises.
Other popular schemes are bill exchanges, impersonation of company officials, door to door sales of counterfeit or poor quality goods, and even fortune-telling.
South Africa & White Collar Crime
The crime rate in South Africa took a turn for the worse in the 1980s. This was the time of confusion and disarray over the country’s government. A study done by the Grant Thornton International Business Report reveals that 84% of employees or their family members are personally aware of a white collar crime having been committed while 90% of companies are investing in security because of growing white collar crimes.
Aside from the monetary loss to companies, the cost of crime to business like white collar crimes affects employee morale, motivation, and loss of customers. South Africa businesses losses about 50 to 100 billion rand every year and causes up to 5% in business turnover. This was revealed by Business Against Crime in South Africa or the BAC.
BAC has also said that white collar crime is making it harder for start-up businesses to get over the usual 2 year period before real income is made. It also prevents them from shifting to a medium-sized business because of the added cost of having to watch employees and managers do their jobs. This cost equals about 1.1% of sales that the company does not get to enjoy or use to reinvest.
The same survey showed that retail and construction businesses suffer more from white collar crime than manufacturing. Furthermore, Durban has a higher rate than Johannesburg. The number of white collar crimes has been increasing in the past years. This was the statement of Nortons Inc, a South African law firm. It has become a huge threat to the economy and deters foreign investments into the country. At present South Africa ranks 64 out of 182 countries in corruption and lack of transparency.
On the bright side, the anti-corruption task team (ACTT) has been able to file cases worth more than 5 billion rand against some of the “big fish” in white collar crimes, convicting 16 and freezing assets worth 550 million rand.