Workplace Fraud, The Enemy Within

Workplace Fraud | The Enemy Within

The high cost of Internet and workplace fraud is increasing at an alarming rate. Most of the frauds are committed by in house experienced employees. The risk of workplace fraud continues to climb as the economy slows and more employees experiencing financial problems.


Reporting Internet Fraud

Every fraud should be considered serious, especially to business and also personal situations. They must be reported so that alll government levels are aware in order to be able to structure training and budget for extra resources. Yes, that’s right. You the taxpayer are paying the bills for this costly crime.


Internet Fraud Statistics

Fraud statistics are getting higher every hour. The fraud investigators will tell you that it has become a very serious problem everywhere. Police departments have had to increase the number of personnel in order to get timely reports submitted.


Fraud cost small businesses $6,200 last year | Preventable

According to Kim Inglis, Business fraud is a major threat to any small business community in Canada, hitting victimized small businesses an average of $6,000. or more in financial costs in the past year.


Fraud attempts | small businesses victimized

One third of small businesses have experienced one or more fraud attempts in the last 12 months, and one in five have fallen victim. Only eight percent of defrauded businesses recovered their full financial costs.


Common Denominators | are you aware

Fortunately, there are a few common denominators that small business owners can watch out for.

  1. Some fraudsters come through your front door and their contact is your employee – who will determine whether you get to keep or lose your money.
  2. Are you certain your staff has sufficient training to recognize common scams like credit card fraud, counterfeit money, or bad cheques or money orders ?
  3. People using fraudulent credit cards have very specific buying patterns ( only expensive items. no concern about price or warranty, et cetera ) that should raise a red flags.
  4. There are simple things your employees can do such as checking signatures or examining credit cards security features. However, if your staff is unaware of the techniques, it’s likely that someone will successfully steal your merchandise.

Fraudsters come prepared | They are determined to win

If fraudsters have determined they’re going to target your business for a bad cheque or money order scam, they arrive well prepared. They will have scouted your business and printed false ID and authentic looking cheques with fake “verification”  numbers. Again, there are specific signs and preventative procedures – but they don’t do any good if your staff doesn’t know about them.


Telephone Fraudsters | Scammers

They don’t come through your front door because their chosen weapon is the telephone, either by talking to one of your employees or through “fax back” scams.

The most common attempted frauds  are email scams and phishing, followed by directory fraud, malicious software and phone scams.


Training Your Staff |  Number one priority

Frauds continue unabated and successful mostly because businesses don’t have proper controls in place and they haven’t trained their staff.

Some prevention can be as simple as hard-and-fast rules about never divulging or clarifying any information about your business, or never agreeing to a telephone business proposal.


Theft And Fraud

Many businesses declaring bankruptcy are blaming it on internal fraud. They say that most frauds are committed by employees with several years experience. Somewhere between 7 to 14 years working for the company. Certainly not a good picture of what our future is facing if this continues at this pace.


Common Types Of Frauds

Include misappropriation of cash and inventory, which are probably the two most common in a great majority of businesses. This affects staff morale and management confidence that really take a big hit. Don’t forget the cost to the business reputation and trust.


Preventing Fraud In The workplace

That is not an easy task to undertake, considering that millions of dollars are lost through these types of frauds. The big questions, is where do business owners start to try and correct this alarming problem. Some early steps that can be taken, include more complete checks of potential employees. Background checks are often not done even though this cost is low compared to the loss of internal theft.


Code Of Conduct employee theft

Many companies and organizations are now insisting that once hired an employee needs to read and understand and sign a code of conduct form. This should be followed up with clear communication about expectations.


Internal controls

Systems and internal controls definitely need to be monitored. Only effective when controlling who has access to data, along with access to phone systems and vaults. Also, it is paramount that a “zero- tolerance policy” be clearly communicated as part of the prevention strategies imposed by the company.


Whistle-Blowing Hotlines

This is another way to effectively let every employee know that there is another pair of eyes and ears to help reduce the risk of fraud in your workplace. This falls into several categories including, embezzlement, corruption and fraudulent documents. These hotlines are becoming more popular in a lot of big businesses. Don’t forget the “National Crimestoppers Associations”.


Crime Stoppers Associations | Canada and USA

http://www.canadiancrimestoppers.org/home

http://www.crimestoppersusa.org/home


Workplace Fraud | The value Of Prevention

Security analyst and certified general accountants associations will tell you that each company, no matter the size, should view prevention, detection and action taken as an investment instead of a cost. Any thing that helps you recover some of the potential loss… is not an expense but rather an investment for your business.


Be Aware | Everyone Is A target.

An ounce of prevention is worth a pound of cure..



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