Current economic conditions such as the cost-of-living crisis are increasing the fear of fraud among businesses, a survey has revealed.
The Institute of Business Ethics surveyed 1,051 UK business leaders and found high inflation and energy prices are the highest-ranked ethical risk factors for businesses.
In this survey, ‘ethical risk’ referred to the risks that could affect the ability of the organisation to live up to its ethical values and standards, undermining trust and reputation and threatening financial and operating performance.
Data protection and privacy, theft and improper spending of company money as well as false accounting and reporting were other top ethical issues for businesses.
The retail sector and SME businesses ranked concern for vulnerable customers and fair treatment of customers highly while for larger businesses it was not a top 10 risk.
Ian Peters, director of Institute of Business Ethics, said: “Larger organisations may be making a mistake by placing the fair treatment of customers at a lower priority than other issues. Customers are unlikely to believe businesses’ claims to be ethical if they have a poor experience with them.
“While industries like financial services are under increasing pressure from regulators to demonstrate their focus on the needs of customers, especially the most vulnerable, concern for customers should really come from within a business and be embedded into a code of ethics.”
The survey also found contribution to climate change and wider environmental impact of business operations, and of products and services, were generally quite far down the list of ethical priorities for most businesses.
This comes after the Financial Ombudsman Service said it was expecting more than 181,000 consumer complaints in the next financial year.
In a consultation paper on its plans and budget, the Fos said it expects everyday financial concerns to be the driving force behind complaints made to the service.
These include a rise in disputed transactions driven by an increase in financial fraud and scams, as well as cost-of-living pressures causing unaffordable lending.
alina.khan@ft.com
