Fraudulent activity such as the theft of confidential data is costing the Irish economy billions every year according to a leading expert in the field.

Peter Dorrington, head of Fraud Solutions at software firm SAS, estimated that these scams are costing the Irish economy between EUR2 billion and EUR4 billion annually.

This equates to a shocking 3 percent of Ireland's GDP.

Dorrington said the theft of confidential data has become a particular cause for concern after recent incidents at call centres in Scotland and India showed personal information relating to thousands of people could be easily obtained by criminals.

"India has become a major target, as the prevalence of call centres grows, but in addition, the cost of bribery is low compared to European countries," he said. "A recent documentary on Channel 4 highlighted this when an undercover journalist was able to purchase 100,000 personal bank records of UK customers from an Indian call centre. However, we must not fall into the trap of thinking that this is an offshore crime; we are not immune to this kind of activity."

Dorrington said Irish companies need to protect their employees from becoming vulnerable to some of the coercive tactics used by fraudsters. "Coercion of employees is now emerging as a significant cause of concern, where employees are being targeted by criminals, and their honesty is compromised," he said. "We have examples of people who have been, for example, shown pictures of their children going to school, and told that if they do not assist the criminal, their children will be in danger. Everyone has a price. Our duty of care as employers includes protecting our colleagues whilst also eliminating the claim of coercion as a spurious defence."

The methods criminals use to enable fraud are becoming increasingly sophisticated as they look for new means to infiltrate organisations. "Criminals are paying to put their junior conspirators through college. They will fund their education in return for their assistance in defrauding companies or to access confidential data. This is serious organised crime with a long-term strategy and requires different forms of detection," said Dorrington.

Dorrington said companies could only protect themselves from fraud if they had the right structures in place to protect them. "It is no longer acceptable to find fraud by tripping over it. You must put strategies and structures in place to identify anomalies and classify them, which will trigger alarms within the company or organisation," he said.