Where Are the Comments

I would like to invite anyone to comment about anything that is currently going on in the business world. Is it fair that all of the big businesses have received their bailouts and the little guy is still waiting for some assistance, be it paying for COBRA extension assistance or an extension of unemployment benefits. Fraud can occur at any level of any organization. Fraud can also be perpetrated against the government and ultimately the taxpayers.

What's in the News

One way to keep fraud prevention in the minds of employees is to bring in current event articles that highlight fraud schemes and how the fraud was detected and also if the perpetrators were sent to jail. A big deterrent in combating fraud is knowing that fraudsters will be sent to jail fined or both. Also the employees have to know that there will be no repercussions if they expose or turn someone in for committing fraud. The Fin Reg laws that were recently passed by Congress and signed by the President contain a provision that will give the whistle blower anywhere from 10% to 30% of the confirmed fraud.

No Backsliding

How does an organization keep the momentum going when combating fraud. Once all the policy and procedures are written and instituted, how does the organization not forgot about combating fraud. One method an organization can use is something to the effect of a fraud prevention tip of the week or day that can be posted on the organization's internal website or newsletter. Along these same lines an employee that has a valuable fraud prevention save or tip could be highlighted in the the same website or newsletter. Reinforce to the employees that fraud prevention is every one's business.

Think Opposite

One thing an organization needs to keep in mind when combating fraud is that fraudulent activities look different as the economy moves through the economic cycle. Pre-recession fraud typically involved obtaining assets and then hoping to sell the asset as quickly as possible, the fraud took place with the customer not providing all the facts or misleading the organization into giving the customer access. An insider could also perpetrate this type of fraud by allowing a customer access with the end game being the insider is then paid a fee or commission. The flip side of this type of fraud is a customer having obtained an asset by either legal or fraudulent means then tries to dispose of the asset by fraudulent means, commonly referred to as debt deflection. The customer will claim they didn't understand the terms of the contract, they didn't understand what they were getting into, they were tricked. The customer may also claim they can no longer afford the terms of the agreement and they want to renegotiate the terms. These are the types of behaviors that occur during a recession.

Keeping the Momentum

Now that the organization has participated in Fraud Training how do you keep the momentum going. Set up a process that anyone in the organization who observes suspicious behavior will have a way to report it anonymously. Also another incentive to get employees to report suspicious behavior is to offer a monetary reward which can be a fixed dollar amount or a percentage of the money saved by uncovering the fraud scheme.

Put One Foot in Front of The Other

You don't have to have a big organization or an organization with a training department to conduct fraud prevention training. But what you do need to do is to act. Bring an expert in to conduct on-site training. An effective fraud prevention training program should only last 1 hour with an extra 30 minutes at the end for a question and answer session. Employees would benefit by learning warning signs on fraudulent behaviors and actions. The internal processes and controls that prevent fraud would then be explained and trained. This is the first step in the goal of a fraud aware organization.

Hiding in Plain Sight

Insider fraud usually occurs in organizations that have weak internal controls and thus allowing the fraudsters to commit fraud while going about their daily work routines. All processes and controls should not only be reviewed but also audited against to ensure fraud is not currently occurring or has the potential to occur in the future.