In today's work environment, with so many employees working from home and businesses adapting to remote operations, fraud schemes related to the pandemic are on the rise.
Many fraudulent activities can be caught by putting effective internal processes and procedures in place, but don't forget one of the best sources of fraud protection: your employees. And in order to detect and prevent fraud, employees must first know 1) what to look for, and 2) what to do about it.
So let's start with the basics.
First, train your employees on your company policies and procedures, making sure they know and follow the rules and guidelines.
It is important that they understand the repercussions of committing fraud – up to and including criminal prosecution. Equally important, employees should know how to identify possible fraud.
When it comes to employee fraud, it can happen in many ways. Some of the most common involve accounting, accounts payable, and payroll functions.
Establish set procedures for what employees should do if they suspect internal or external fraud. Your procedures for handling external fraud can be fairly straightforward. For example, if a cashier suspects that a customer is attempting to use a stolen credit card, they should immediately notify a member of management before proceeding further.
With internal fraud, the actions taken may not be so clear-cut. Many employees will hesitate to accuse others of illegal or unethical behavior. It is therefore critical to create a climate of trust by establishing a confidential way for employees to share their concerns.
In short, to help protect against fraud, thoroughly train your employees, and then follow up to make sure that training is consistently put into practice. Effective training can help protect against fraud both externally and from within.
For more topics on business security and fraud protection, visit First Horizon's learning center or contact your business banker today.