Protect Your Business From Modern Day Fraud Threats
Fraud has been something that has been around since ancient Greece when a sea merchant tried to swizzle insurers by capsizing his ship but keeping its goods. In its simplest form, fraud is a crime in which some kind of deception is used for financial or personal gain.
Companies Can Be Liable Without Fraud Protection
A lot of small and medium-sized enterprises or start-ups tend to focus on their great ideas rather than fraud security. What they often miss putting in solid company practices and protections which will prevent serious malpractice and subsequent financial and legal fallout. Large organisations can be criminally liable for fraud by employees or associated agents unless they can prove they had reasonable measures in place.
Businesses can put measures in place that will protect themselves in this modern age of fraudulent activity. Cybercrime has seen a significant rise with almost costs expected to go into trillions in the next few years.
Preventing Phishing
One of the most common attacks is phishing, where individuals can trick users into revealing confidential passwords or sensitive information. This is normally achieved by a message that looks legitimate in its delivery and creation but is actually a clever scam. Obvious signs can be scanned such as poor punctuation or if the message is signed to a generic “valued customer.”
Organisations should also review their website details as this could inform or educate the attackers in their aim to look authentic. Two-factor authentication will increase security even if passwords are breached. Employee accounts should also be given lower authority so that if the system is breached, the damage is minimal.
Check Fraud Can Be Stopped
There is Check fraud prevention via photocopying or alteration is another issue that can literally break the bank for companies. The most basic safeguard is to store checks away safely in a locked cabinet so that access to paper fraud is reduced. Using an ink that can’t be erased is also another simple measure to ensure details can’t be overwritten.
An image survivable feature (ISF) is another more technical detail that has reduced counterfeit checks in recent times. This feature is compatible with the major banks and is essentially an encrypted code number printed on the face of the cheque. Any discrepancies are automatically flagged for review by fraud prevention in the clearing system, meaning that this is the strongest form of security.
Payroll fraud and money fraud are significant issues as often the process can be hidden from view with one person able to manipulate the system. Payroll processes as a whole should be rigorously split and segregated.
For full transparency, there should be regular audits so that any discrepancies can be flagged up even if they are innocent issues. There should be regular appraisal and implementation of policies that involve strict adherence like reimbursements, overtime approval and time reporting.
Modern technology can be utilised so that in-built systems and algorithms can immediately any suspicious activity. The increase in biometric software can also be used to identify where temporary cover is used for a regular employee.
Staff Integrity Training
Fraud detection systems are key, but one of the greatest protections is to create an environment of full transparency in an organisation. By training and incentivizing staff on the importance of ethical standards, there is more chance of creating a safe environment. Respect between colleagues and for the organisation as a whole through recognition and reward programmes can go a long way in safeguarding against internal and external fraud threats.
Business fraud can cause havoc for companies that have 21st-century ideas but haven’t implemented modern defence against sophisticated fraudulent activity. The reputational damage, liability and financial losses caused by fraud can create a triple whammy that organisations cannot recover from.
Fraudsters have upped their game by utilising the advance of technology and societal advances. Business must do the same to avoid the worst-case scenarios.