Far too many businesses fall victims to fraud. One study found that the average business loses 5% of its revenue each year to fraud. This means that the cost of fraud to businesses is $3.7 trillion.
However, most businesses aren’t prepared to handle it. One survey found that 48% of businesses feel that they are too small to be targets of fraud. Unfortunately, that is not at all the case.
You need to be prepared for the possibility that your business will be a fraud victim. You can take the following precautions to protect it.
Protecting Your Business from Potential Fraud
How do we define such a prevalent criminal intent as a fraud? Fraud is an act that intentionally seeks to deceive or harm a person or corporate entity for criminal or personal gain. Fraud falls under crimes against property as well as criminal torts. A tort is defined as a wrongful act other than a breach of contract. A scam is a criminal intent to deceive a person of their legal right. That right may be to make a business transaction through lawful means, care for one’s health or the health of a spouse, to safeguard one’s personal property and the dignity of one’s name, and dealings with others in a just society that provide services and goods.
The Fight Against Fraud
The heart of fraud is the intent to deceive a person. It is estimated that $40-60 billion is lost every year because of the many types of fraudulent activities. The Federal Bureau of Investigation (FBI) has a website dedicated to identifying and prosecuting scams and frauds. Frauds happen in every walk of life from business to government. A church even suffers frauds that pose as a religion to lead people astray from their freedom to practice religion. People do not have to stand by silently if they suffer from fraudulent activity or know of fraudulent activity happening in a place of business. You can find legal representation at Elias LLC. They are relentless in litigating and trying cases against corporate giants. With Elias LLC, you can be sure you are dealing with some of the best attorneys. They use aggressive case strategies which have resulted in tens of millions of dollars in recoveries for their clients.
How Fraud Creeps In
A common question people ask is, “How does fraud creep in?” In some ways, it can be avoided by having very high security around all business transactions. Many businesses are continuously concerned about payment fraud because companies rely heavily upon money that comes to them daily from transactions. Frauds of all kinds have multiple ways of creeping into a business or a fair deal.
For example, a pharmaceutical fraud epidemic of considerable proportion has infiltrated the drug market. Fake drugs are made and imitate the real counterfeit drug down to the packaging, but there are no medicinal values. The fraudsters have found cracks in the mainstream pharmaceutical networks and distribute their fake drugs alongside the real thing. It could be an employee who wants to make extra money and they allow these drugs to get into the distribution network. Another scenario is when the major pharmacy companies ship their medications. The drugs are intercepted and a swap takes place. When a pharmacist buys these drugs thinking they are getting a product from a major pharmaceutical company, they get a fake.
Expected or Unexpected Fraud
One security analyst said that it is very possible that fraudsters will target a company’s network if it has very little security. A company must make sure they have a high-security network that will not allow any intrusions in the system.
What an Employee Can Do
Some of the largest companies, such as the New York Times and Fox News Network, can be targets of fraud even though they are not aware of it at the moment. Scams on the internet are a vast business and cyber forgers steal millions of ad dollars from large companies without them ever knowing it is happening. The FBI is just becoming savvier in tracking and prosecuting this kind of crime. The FBI has an 800 number you can contact, as well as an anonymous tip line, to report fraudulent activity at any time of the day or night. They allow the person reporting the crime to remain anonymous.
If You Suspect Fraud Is Taking Place
If you suspect that any fraud is taking place in your life or someone else’s, then the best thing to do is to make a formal report to an authority. Do a search on your phone, PC, or desktop for “fraud hotline.” Just remember that for every scam you help to stop, you will be helping save someone’s identity or money.
Save Your Business from Fraud
Fraud is a terrifying problem that costs businesses trillions of dollars. You need to know how to mitigate the issue to keep it from destroying your company.