Business planning

How to Prevent Fraud in Your Business

check-fraudFraud is something that we all try to avoid and prevent, and there are many different types of fraud. From minor offences, such as reusing a postage stamp, to much more serious crimes, such as identity theft and forging bank notes, there are many varieties of offences and fraud crimes that could be prevented in the work place and in your business. The secret is knowing what the different types of fraud offences are and being aware of the steps you can take in order to prevent them as much as you possibly can. Here are some of the way you can prevent fraud in your business.

  • Make sure everybody has a background check

It’s your business, and if you require everybody to have a background check before commencing work for you, then that’s the rule. It doesn’t matter whether they’ll be working with children and it’s a government regulation or if you simply would rather check out the people you hire before actually giving them the job. Most employers are quite cautious anyway, and will ask for references and other such documentation before proceeding any further with the process. While background checks can cost you money to carry out, it’s definitely better to lose a little bit of your revenue and hire trustworthy, loyal and crime-free members of staff.

  • Ask for references

This is pretty much standard for any kind of job that you apply for, so the interviewees won’t have a problem at all providing you with at least two references. Don’t be afraid to be picky about the type of references that you want - you don’t really want to ask for the contact details of a friend or even of a close friend. The best thing to do is to ask for references from either past employers or teachers/principals from their previous places of education. By doing this, you’ll ensure that you’re getting references from professionals who knew the candidate in the type of environment that you’ll be knowing them. It also gives you peace of mind that you’re not getting references from one of their friends who will give them a good reference for the sake of doing them a good turn. If possible, contact the referees by telephone and ask them specific questions about the candidate. If you’re worried about fraud, ask specifically about trustworthiness and loyalty.

  • Report anything you might find suspicious

Once you’ve hired your staff and they’re under a long-term contract with you and your business, it can be more difficult than you think to fire them. You may suspect fraudulent practice from one or more of your staff members, but you can’t prove it. However, it is becoming a constant source of worry to you, and that’s certainly not conducive to a successful business. Luckily, you can report any suspicious behaviour to the police or fraud investigation teams. It really is amazing how many reports turn into serious fraud offences, so you can ever be too careful. “Over this past year, my firm has seen a steady increase of HRA fraud investigations that evolved into welfare fraud criminal prosecutions”-says Todd Spodek of Spodek Law Group.

  • Give the staff regular training

It’s important to give your staff members regular training in many areas, and fraud is certainly one of them. Apart from training them in customer service, health and safety and any recent changes that you’ve made to the business and how it operates, you should make sure that each and every one of them knows exactly what to look out for when it comes to fraudulent practices. One of your staff members might see something but not realise that it is part of a fraudulent practice carried out by other staff members. For example, logging in and out of other employees’ accounts should never be acceptable, even if that member of staff has given permission. Such rules should be enforced strongly, so that none of the members of staff are worried about fraud in the work place. If staff members carried identity cards, they should be used only by that member of staff, and not by other staff members, even if they may have forgotten to bring their own card that day!

  • Be somebody your employees can trust

Your staff members will be much more likely to report practices of fraud to you if they feel that they can trust you. An employer who treats his employees badly will probably find that the staff members don’t want to speak to him, especially about matters such as this where they could be wrong. It also means that they’ll be getting their colleagues into trouble with you, and if they feel that their loyalties should lie more with their colleagues than with their employer, you’ll find that they won’t report instances of fraud.

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