Fraud Prevention

A Fraud Prevention System in place is key to keeping the deterrence of financial crimes at a minimum.  Businesses can suffer an average loss of 5% of their revenue to fraud without them even knowing it is happening.  To make sure your business is taking all necessary precautions to deter fraud, a fraud prevention evaluation should be a part of your business operations.  Please contact us for more information.

Simple internal-control practices to lower your fraud risks

• Segregate bookkeeping duties to more than one employee
• If one employee handles 100% of the bookkeeping, review their work
• Request Bank Statements delivered to the owner un-opened
• Review all canceled checks for payee and endorsement accuracy
• Review inventory valuations with physical counts on a regular basis
• Review new vendors and make sure they are on an approved vendors list
• Review purchase orders
• Review new customers to make sure they really exist
• Review accounts receivable aging reports to assure timely payment of invoices
• Require supervisor approval for customer credit and charge backs
• Check for related names and personal information such as mailing addresses between your employee list, customer list and vendor list.
• Spot check payroll time cards with payroll reports
• Distribute payroll checks by an employee who is segregated from payroll functions.
• Review expense reimbursement reports with actual expense receipts - original receipts should be requested to receive reimbursements and approved by a supervisor.
• Do not leave company checks or financial records out in un-locked filing cabinets or on storage shelves
• Destroy all un-used checks
• Enable job rotation
• Enforcement of mandatory vacations
• Surprise Audits where possible
• Create a pro-active fraud prevention program in the work place

 Dishonest Employees

 Unfortunately your employees are 15 times more likely to steal from you than your customers.  A strong deterrent for dishonest employees is knowing exactly what the ramifications of their actions will be.  Employees need to know that if anyone steels or violates company policy at any level, they will receive a fair hearing, however swift, consistent and serious sanctions will be imposed such as termination, criminal prosecution and possibly civil action

 Other Common Scams

• Bogus Yellow page bills
• Phony Invoices
• Solicitations as invoices that are created look like actual invoices for goods or services such as "Non-compliance for your Corporate Minutes"
• Phony ad solicitations
• Slamming phone scam where the phone service is changed from one provider to the next without approval or consent of the company
• Nigerian 419 are investment scam e-mails for advanced fee fraud demanding funds up front for a large sum of money that will never arrive
• Transfer of money from Over-Invoiced contracts by transferring money into an overseas bank account owned by a foreign company.

What To Do If Your Identity Is Stolen

Start keeping detailed records

Close all accounts that are affected by the fraudulent activity

Notify all creditors on your credit report

Check for and repair further breaches of your identity

Notify law enforcement agencies - Federal Trade Commission - Federal Bureau of Investigation - United States Secret Service - Local and State Agencies

Notify the fraud units of the following principal reporting companies - Equifax 800-525-6285 or 888-766-0008 - Trans Union 800-680-7289 - Experian 888-397-3742

www.consumer.gov/idtheft/