While many assume that attacks of fraud come from the outside, 90 percent of fraud incidents have at least one touch point inside the organization. Employee fraud is a significant problem faced by organizations of all industries, no matter their location.
Organizations can count on the majority of their staff to neutralize, or at least counteract, occupational fraud. This can be achieved by creating the right conditions and incentives for these employees, also known as whistleblowers. Tips are a very effective, powerful, and economical fraud-deterrent mechanism compared to other processes with similar purposes such as internal audits and management reviews. Their contribution, exposing either ongoing or imminent fraud, accounted for more than 51 percent of all fraud detection cases in large organizations according to the Association of Certified Fraud Examiners.
Fraud Hotlines can greatly enhance the power of tips. The study by the Association of Certified Fraud Examiners indicates that organizations that made a fraud hotline available, were able to capitalize on whistleblowers’ tips to unveil more acts of fraud than those that did not. Phone hotlines were the preference of whistleblowers (40%). However, when all Internet-based channels such as web-based online forms (23%) and email (34%) are added up, they outnumber tips given through a phone hotline.
Companies must consider where and how fraud is committed in order to determine the controls that will prevent and detect fraud. There are many potential strategies for such an effort, including the development of fraud hotlines. The right business partner can help your company understand its current security status as well as the correct measures to deal with this very serious issue. Contact us today to learn more about how we can help you improve your security.