Many people believe fraud is just another term for theft. However, the difference between the two is that fraud stems from deception or misrepresentation to make money. It happens more often than you think as the typical organization loses a median of 5 percent of revenues each year due to fraudulent activity. That, in turn, amounts to billions of dollars that belong to American businesses.
Fortunately, you can help prevent common practices by knowing the latest fraud techniques and anti-fraud safeguards. First, it’s important to know that fraud can happen in a variety of ways, including:
While both large and small organizations fall victim to fraud, companies with fewer than 100 employees are particularly vulnerable compared to their larger counterparts. According to the Association of Certified Fraud Examiners (ACFE), the median loss resulting from fraud was $145,000, with 22 percent of those cases reporting losses of at least $1 million.
Because fraud equals loss, your organization sees the effect in its cash flow and profitability. That, in turn, can affect things like salaries, hiring, product enhancements and technology upgrades. By watching for suspicious activity, you can help prevent a hit to your bottom line. Here are a few trends to monitor:
Be alert and aware of current scams and fraud trends in your area. Then, use the information as your guide to pay close attention to alerts and warnings. You can arm yourself with the right tactics to help prevent fraud by adopting some effective, common-sense methods:
Fraud matters. Getting into the discipline of working to prevent it starts with you -- from education to ongoing vigilance. Arm yourself with an arsenal of leading-edge tools and then take the right steps to deter the activity. If it happens, investigate every case regardless of the amount. Find out more about giving yourself a whole new level of protection against fraud here.[cite::171::cite] [cite::172::cite]