The havoc wrought by insider fraud can have far-reaching consequences for both your company and clientele. Several recent examples have proven how damaging fraud can be in the financial sector. But, in truth, there isn’t a single industry today that can afford to forego implementing safeguards.
According to an article at online news source Bank Info Security, one such incident in Ohio earlier this month lead to the collapse of a credit union and a man being sentenced to 37 months in prison for loan fraud and money laundering. About a week prior, two former employees of Chemung Canal Trust Company Bank pleaded guilty to masterminding a seven-year embezzlement scam that cost the bank roughly $325,000.
Insider fraud, also known as friendly fraud, is a difficult topic for many businesses to tackle because it involves trusted employees betraying the companies they are supposed to be – and often appear to be – loyal to. However, the dangers are far too real to be ignored, and fraud detection must be a top priority.
When an employee commits fraud, there are obvious legal entanglements, not to mention the loss of money they’ve stolen. But, there’s much more to it than that. Not only will clients begin to question your company’s dedication to keeping their information secure and the safeguards you are willing to put in place, but they will also question your ability to assess your employee’s character. And if they cannot trust your judgment in hiring reliable individuals, how can they expect to trust you with their business and their money?
Companies must be proactive and pursue the most effective measures of fraud prevention, or face the uphill task of earning back the trust of their customers. Any business owner who has not strongly considered a fraud workshop to help bolster the company defenses should take a look at recent news stories and give it some more consideration.
John Sileo is a fraud detection and prevention expert and will be hosting a FREE Fraud Webinar on Thursday, January 31 at 2 p.m. EST.