According to the Association of Certified Fraud Examiners (ACFE), companies lose an estimated 5% of their revenue annually due to fraud. Fraud takes many shapes and forms, among them corporate fraud, consumer fraud, tax fraud, identity theft and many others.
Occupational and white-collar fraud is an extremely costly problem for global businesses. The median loss caused by occupational fraud cases in a 2018 ACFE study was $118,000. The study finds that schemes can continue for months or even years before they are detected, with the average length spanning 18 months.
Each year, fraud fighters around the world use International Fraud Awareness Week as an opportunity to come together to raise fraud awareness in their communities and companies. In 2019, Fraud Awareness Week is November 17-23. This is the perfect time to start discussions among peers, coworkers and executives about how important fraud prevention is to society as a whole but also specifically in our companies.
During Fraud Awareness Week, participants are encouraged to engage in awareness-raising activities and initiatives in support of the anti-fraud movement. The ACFE’s suggested activities include hosting fraud awareness training for employees and/or the community, conducting employee surveys to assess levels of fraud awareness within their organization, posting articles on company websites and in newsletters and teaming up with local media to highlight the problem of fraud.
Here are a few best practices for fighting fraud at your organization:
- Talk about fraud prevention. Just speaking about it deters fraud.
- Utilize corporate resources, such as running a credit check on all new customers and consulting with legal before entering into new contracts.
- Verify worker hours to decrease the risk of forgery and wage and hour violations.
- Take time to appreciate your staff. Talk about the Employee Assistance Programs (EAP) available through HR.
- Do not ignore reports of suspicious activity. When staff members bring a problem to management’s attention, management owes it to the company to look into the matter.
- Conduct site visits prior to sending workers to third-party worksites.
- Take a look at the reports. Are you really looking at the data from your branches? Are you asking questions when something doesn’t make sense?
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