Nov 12, 2017
Organizations worldwide lose an estimated 5 percent of their annual revenues to fraud, according to the 2016 ACFE Report to the Nations on Occupational Fraud and Abuse. The median loss per fraud cause is $145,000. More than 20% of fraud causes involve losses of $1 or more.
Identity theft, embezzlement, tax fraud, insurance fraud—sometimes perpetrators in these cases believe that they are just hitting a wealthy corporation that won’t even feel the loss. But the fact is, we all end up paying when fraud is perpetrated.
We’re not bringing all this up just to make you feel nervous and depressed! This week actually happens to be International Fraud Awareness Week. And even though fraud is far from a fun subject, it’s an important one—especially because it gives us an opportunity to remind you how you can protect yourself, your family, and your business.
* Be proactive. Speak to your workers about your company’s code of ethics, and make sure they understand that you expect them to follow it. Identify areas of your business that may be vulnerable to fraud—and plug those leaks.
* Hire wisely. Establish hiring protocols, and follow them. Among those hiring habits: conduct thorough background investigations of your potential employees.
* Make use of your first line of defense. Your workers can provide immense protection for your business—but only if they’re trained to do so! Make sure they know the warning signs of fraud, and that they’re trained in basic fraud prevention techniques. Ensure that your team knows how to report suspected fraudulent activity among their colleagues, too.
* And on that note: establish a fraud hotline—whether it’s an actual voicemail number where team-members can safely and anonymously report suspicious activity, or just a locked box where workers can slip notes about suspicious activity.
* Don’t let potential fraudsters feel comfortable. Talk with your workers regularly about your company’s anti-fraud policies, the steps you take to prevent and uncover fraud, how your company handles fraud when it is detected, and the potential consequences—including termination and prosecution.
For more than 25 years, Beall Financial and Insurance Services, Inc., has been helping corporations and individuals protect their most important assets. The agency’s client base covers a spectrum of niche businesses, such as craft breweries, that require specialized insurance packages and knowledge. With California offices in Redlands and Newport Beach, Beall Financial and Insurance Services serves clients nationwide.