Exclusive: Protecting Your Business from Fraud
October 13, 2020 | Fraud
Common Crimes in Business
For years the world has seen news of people being scammed by companies small and large. But truth be told, it’s more often the companies who are being scammed by customers/clients and their own workers.
But how does it happen? And how can crime be avoided? Well, there are plenty of precautions to be taken. But before looking at prevention measures, you’re better off to start by learning about the six most common crimes in business...
1. Return Fraud
If your business sells goods, you’ve likely already experienced this crime.
Return fraud is a form of theft that happens when a customer abuses the return process. There are many ways people get away with this one but a few to note include:
-
Stealing goods from a store and later returning them in exchange for money.
-
Purchasing goods with counterfeit money and returning them in exchange for real cash.
-
Purchasing goods, using them, and returning them for money back.
2. Business Identity Theft
The impersonation of a business. In these cases, a separate entity will take on the identity of a targeted business. In doing so, they will acquire a level of authority that enables the thief to access concealed information and security details.
This becomes a high risk when thieves gain access to company bank accounts along with ability to take over public representation of the company. What’s more, this crime can be performed by anyone - inside the company or not.
3. Payroll Fraud
Among the benefits of having trustworthy employees, avoiding payroll fraud is a highly valuable advantage. This crime happens in several ways with the most popular being false timesheet submissions.
Should you come across this issue, it’s important to note that it can be committed by both employees and the management in charge of payroll.
4. Insider Trading
One of the greatest concerns for white-collar businesses... Insider trading is the illegal exchange of a company’s non-public information which results in the purchase or sale of the company’s stock.
This is a large-scale crime which can see millions of dollars swept away and it isn’t taken lightly in New Zealand. Penalties of insider trading can result in years of jail time and repayment of up to three times the gain made.
5. Embezzlement
Another crime popular among white-collar businesses, embezzlement occurs when a person uses money for a purpose different to the original intention.
These crimes can be difficult to avoid as embezzlers generally have legal access to the funds. The crime is simply a risk you take when trusting others with your money. Thus, to avoid embezzlement, it’s important to employ trustworthy people in roles of financial management.
6. Money Laundering
Money laundering is the process of “cleaning” money so as to conceal its origin. This is a method used by people who’ve made money via fraud, theft, or tax evasion.
How is money laundered? Criminals may add the money to their bank account in several small transactions to avoid triggering suspicion. They might buy assets with cash and sell them for a bank transaction. And often, they’ll exchange it for foreign money.
How To Prevent White-Collar Crime
Are you the owner or operator of a company? If so, don’t wait to educate yourself on the simple precautions you can take to avoid theft and fraud. Below, our private investigators have detailed the core aspects you should focus on.
Make Smart Hires
As you will have noticed, hiring trustworthy employees is essential if you want to avoid crime in your business. This applies to every role, from big to small.
The best way to achieve this quality throughout your workplace is to hire the right people in the first place. What employers can do to make sure this happens is undertake background checks on all potential employees.
Educate Employees
In order for people to get away with theft and fraud their efforts need to go unseen by other colleagues. With this in mind, it’s important you educate your employees on the many red flags.
Do this by teaching them about what activity is considered suspicious in your workplace and the relevant steps to be taken should they detect any possible issue.
Review Previous Incidents
Any previous cases of theft or fraud are ones to learn from. If crime has happened within your business in the past, make sure to review the incident and why it happened.
From this analysis you’ll gain a vivid picture of what should be done differently to avoid it happening again. These new measures might include updating management systems or increasing security.
Investigate Suspicious Activity
Noticed unusual behaviour from your employees? Or perhaps, have they come to you about the suspicious activity? If yes, don’t wait to investigate.
In some cases you can evaluate the situation yourself. However, should you come to a point of believing that you’re dealing with a real crime, it’s vital you stop digging and bring in an expert. Most business owners will turn to private investigators.
Why bring in a professional? Put simply, if you push too hard when looking for evidence you might spoil the case or accidentally alert the criminal, leading them to cover their tracks.
Think You’ve Been Scammed?
If you or your employees suspect theft, fraud, or illegal behaviour, don’t wait for the issue to become large, more costly, and impossible to solve.
Get in touch today for a confidential conversation with an experienced, trusted Private Investigator. Together, we can discuss the best options for your business.
