Fraud Advice

According to the Federation of Small Businesses (FSB) some 20% of all crime takes place on business premises. When you think of all the theft, murder, drugs and the like, this is an awful lot of crime!

The reason of course is that businesses are the target for all forms of fraud – employee fraud, creditor fraud, supplier fraud, Internet fraud…the list can go on. You should not wait until your business becomes a victim as it inevitably will at some point, do something about it now.

Apart from the obvious security issues for your assets, you need to put together a fraud reduction strategy that will help protect your business from various types of fraud, phishing, pharming, identity theft plus hacking and virus threats to your IT systems.

Your data needs protecting also. Even apparently simple information such as your customer lists are valuable and you do not want your employees giving it to your competitors. The data can also be lost through burglary and criminal damage to your premises. Think of the effort that would be required trying to recreate this information.

Remember to vet your employees when recruiting. You want trustworthy workers who will not put your business and assets at risk. Resumes very often contain falsehoods, and at best exaggerations. Make sure you take up references, check periods of employment and question what an applicant was doing in a “gap” period. Perhaps they were doing time at Her Majesty’s pleasure for fraud! Yes fraudulent employees do commit the same crimes time and time again, moving from one complacent employer to another.

Complacency is the name of the game when it comes to fraud risk. Although it does not always pay to be overly oppressive in your anti-fraud policy and cause resentment and even fear amongst your staff, a tightly controlled work place will undoubtedly prevent the fraudster striking or at least make him think twice before having a go.

Mark Jenner is a forensic accountant and fraud expert advising companies on cost effective ways of preventing fraud.

I thought that an article in the Sunday papers about the Serious Fraud Office this week would be a welcome read. However as I read down the first colmun the old cynicism crept in! The piece was an interview with a senior staff member Phillippa Williamson.

It was not the human angle that annoyed me, but the alarm bells began to ring when I noticed that prior to the SFO she was working for HMRC in charge of tax credits and child benefits. Reading down I was reminded that her current boss, Richard Alderman was also a former colleague at Revenue & Customs.

I have often noticed the various positions being advertsied – head of Asset Recovery Agency, Head of this, deputy for that – and in each case I have considered (for a very brief moment) applying. I have occasionally taken a passing interest in those that get the jobs. The Curriculum Vitae usual gives a history of public sector posts a little like Ms Williamson.

It upsets me a little to think that my industry’s flagship fraud regulator is just like any other politically driven organisation. I do not believe that politics and results go hand in hand very often and the regular accusations of cronyism by the press are well founded it seems.

Fraud is an insidious problem in the UK. Yes, I am just looking at the UK today, but no doubt many other countries will have the same problem. We are getting a Fraud Reporting Center so that we can begin to know really how much fraud costs us every year. We might be merging the SFO with the Financial Services Authority (particularly likely as the Conservatives are advocating this move). There was talk about a merger of the SFO with the Serious and Organized Crime Agency a while back.

There is plenty of talk, it seems that all parties recognize the threat of fraud, in the same way as they know there are too many vehicles on the road and that the railways ought to be developed properly. It is one thing knowing, setting up inquiries, having expensive working parties report the problem. What we need is direct action to stop fraud becoming further entrenched into our way of life. I hesitate offer more quasi political advice but perhaps the country needs its own “fraud policy”? I and others are always preaching to companies that they need one – it would go a long way to deter the fraudster and perhaps remove the need for the self gratifying public relations exercises that the SFO feels that it needs to promote in the form of reported interviews with its old schoolboy (or girl) network of staff!