• Date

    15 Oct 2021
  • Category

Top Tips for Avoiding Fraud

Fraud is on the rise as a result of the pandemic, with the UK Finance reporting fraud losses up by 30% in the first half of 2021. Whilst it is always difficult to guarantee you won’t be affected, there are various things you can do to protect your organisation. But always bear in mind fraudsters do not care who, what or where you are when attempting to defraud.

Whilst prevention is better than cure, it does take time. You need to prioritise those actions that will have the maximum impact for the minimum investment. Here are our top tips for avoiding fraud:

  • Know your area of risks and profile them. This is what an organised fraudster will be doing so you should be doing the same.
  • Have policies in place where staff can report suspected fraud, for example a whistleblowing line. This needs to be clear, easily accessible and staff trained how to report alleged fraud. Your staff are your eyes and ears and are a valuable asset in combating fraud.
  • Make sure everyone has a proper break from work every year – if you are committing a fraud, you need to be in control of your area at work all of the time, so no one picks it up. Giving staff a proper break and having someone else cover their role is not only a disincentive, but it can also result in frauds being uncovered.
  • If staff are continuing to work from home or being agile, make sure you consider the fraud risk associated with this i.e. are home systems more susceptible to cybercrime?
  • Be sceptical – it’s amazing how many people affected by fraud say ‘I should have known’. Don’t turn a blind eye. How is it that your lowest paid member of staff has just bought a new car, had a house extension or had a lavish holiday? However, do be careful how you question people on their finances – you do not want to necessarily upset a trusted member of staff.
  • Have different members of staff recording and paying invoices – difficult to do in a small team but crucially important to ensure you only pay legitimate debts.
  • Review payment runs properly (with supporting documents) – don’t leave it to chance and assume everything is OK.
  • Challenge your financial results – if you’re not making as much money as you think you should be, then look into it. Are your costs creeping up, or are they inflated because of fraud?
  • Beware of over-complicated procedures – being blinded by science does not necessarily mean your employee is a genius. It could be a cover-up to ensure no one understands what is going on.
  • Do not pre-sign blank cheques - it sounds obvious, but it happens, and we have seen fraud as a result.

We don’t want to scaremonger, and it would be wrong to suggest that you should stop trusting your team. However, in our experience people who have been affected by fraud nearly always look back and wonder why they didn’t spot it.

Whilst we can investigate fraud and quantify the loss, if the individual concerned has no assets there is little chance of receiving compensation. Therefore, it is important to establish an investigation strategy if that is the route you wish to follow.

If you have any concerns about the fraud risk to your organisation, we are happy to talk them through and help you to review your internal controls and procedures to ensure they are up to scratch.

Would you like to know more?

If you have any queries regarding what we cover in our guide, please get in touch with your usual contact or email hello@azets.co.uk

About the author

Martin Chapman Photo

Martin Chapman

Partner Birmingham
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