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Five Things You Never Wanted to Know About Business Fraud

Business fraud is widespread and hard to stop. It could be affecting you right now, and you probably wouldn’t even know. Scare yourself silly with these five frightening fraud facts, and then take steps to protect yourself before it’s too late…

Industry sources say more than 75% of business fraud is committed by an insider

Price Waterhouse Cooper conducts an annual survey of business fraud. Since 2009, an increasing number of detected frauds have been instigated or helped by inside involvement. When you think about it, this is hardly surprising. The insider has the most knowledge of your company, and so stands the greatest chance of successfully defrauding you. And employee who has been with you long enough to understand how your processes work has the potential ability to destroy you. Be afraid. Be very afraid.

Fear of job loss causes fraudulent activity

One of the biggest problems facing businesses is the definition of fraud. A middle manager who falsifies some of the performance reports for his department is guilty of fraud, with consequences that can be hugely damaging to your brand – and which can lie dormant for months before being discovered. One of the biggest causes of this kind of fraud is the fear of losing one’s job. In the increasingly pressured world of post-global meltdown business, job loss is a real threat: your managers may defraud you just to avoid it.

No blame, no claim?

Another consequence of the financial meltdown has been an even harsher uptick in the number of attempted lawsuits against companies. If a legal firm offers you some money because you fell over in someone’s car park, you’re apparently even less likely to say no now your own financial security is so embattled. The upshot? Companies get defrauded regularly by claimants looking for a quick buck off the back of the “no win-no fee” system.

Building companies may be out to get you

The construction industry is unfortunately notorious for fraudulent activity. The most common type of construction fraud in terms of business effects is the contractor who fails to deliver the work as promised – be that on time, in budget, or as described. Unfortunately, there is little that can be done to prevent an unscrupulous contractor from ripping you off – because you never now for sure that the work will be satisfactory until it has already been done. You can, though, take pains to research the contractor you are about to hire, before you sign on any dotted lines.

 Your employees have no idea how to spot or prevent fraud

A fraudster is tricky by definition. He or she spends his or her time working out ways to fool normally sensible people out of their money or assets. It is therefore imperative that you invest in fraud prevention training. A staff member who is able to spot potentially fraudulent behaviour is a staff member who may be able to save your company a lot of money. You can look at the Focus Training website for more information.

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