Article
Written by Nick Driver
Posted on 26/08/2014

Train employees properly to prevent fraud

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Fraud prevention is at the top of many business’ risk management priority list, as threats are faced both internally and externally. Establishing procedures to identify and deal with fraudulent behaviour is as important as training staff to act appropriately when they suspect wrongdoing. 

 

Review and alter internal processes 

When it comes to employee fraud, the most common tactics include exploiting accounting and payroll functions, as well as expenses. It’s far easier to swindle a business when you have responsibility in this area, particularly if the internal processes in place are ineffective. To prevent fraud from your own employees, examine your current approach and ensure all staff are aware of company policy and the repercussions if they are caught. 
 

Train your staff to follow the new approach

After deciding on a new approach, separate responsibilities and allocate them to numerous individuals so no single person has complete control. By cross-training staff and giving them responsibilities to check the actions of others, you can also better expose any unusual behaviour. It would also be worthwhile to teach staff how to perform a basic internal audit, and announce these spontaneously as an added deterrent. 

Identify threats outside of the company

With a strong internal structure in place, focus training on the external environment to help staff identify threats and feel confident in what action they should take. Common methods of exploiting a business include:

  • Identity theft
  • Credit card fraud
  • New account fraud (setting up an account using stolen data)
  • Invoicing for services/products not delivered
  • Invoicing for services/products that were delivered but not needed or requested

It is important to firstly decide which policies are right for your business before training can begin. For example, a retail firm may choose to ask for ID before accepting cheques or credit cards to help avoid identity theft. Whatever you implement, frequently monitor your staff to ensure procedures are being followed as intended.

Procedures for internal and external fraud>
Finally, internal and external fraud will need to be handled in different ways, as the former involves your own employees. When it comes to external fraud, the most suitable approach is to have the member of staff who believes a customer is attempting to commit fraud inform a senior manager who can take appropriate action. Internally, employees may be reluctant to point the finger for fear of jeopardising their own position, so build a culture of trust and make it possible to confidentially share any concerns with senior management.  

Fraud has the potential to seriously damage your firm’s finances and reputation with customers. Consider your current procedures and the training staff have to ensure enough is being done to protect your company’s interests.

 

Do you want to know more about various different methods that fraudsters use to pass into the heart of an organisation and how to protect your business against this growing issue? Go directly to our download center and download the eBook for free!

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