Virtually every business faces fraud and has cost companies an estimated 5 percent of their annual profits. Businesses who lack preemptive fraud prevention measures are the most at risk. Fraud itself can be a civil wrong or a criminal wrong, and in some cases, it may cause no loss of money, property, or legal right but can still be an element of another civil or criminal wrong. Traditional in-house controls can be ineffective in averting fraud. The most important thing to do is to discover what steps can be adopted by individuals to protect their business from fraud.
There are a number of techniques to commit fraud, as criminals use their imagination in finding new methods every day as the world progresses. Some of the most generally committed types of fraud include:
- Check Fraud: Check fraud happens when an individual deliberately pays for something with a check and knows that there is not sufficient cash in the account to cover the cost or when a person fakes or forges a check stolen from someone else.
- Internet Sales: Internet frauds are becoming more widespread since the world depends severely on technology. This type of fraud comprises of selling fake or forged items or taking fees with no intention to ship or deliver the item.
- Website Misdirection: This happens when hackers copycat respectable establishments such as Amazon, eBay, or PayPal, transmitting customers to another website where they enter their credit card information. The criminal then uses this information to make personal acquisitions.
- Charities Fraud: For several years, felons have benefited from the fact that Americans generously give to praiseworthy causes. Convicts implore individuals to make contributions to different foundations that do not exist.
- Work-from-home Scams: Operating from home sounds like a dream come true to many people, so it is not astounding that a number of individuals fall for this sort of fraud each year. Criminals promise a salary to people who sign up for their fabricated work-from-home job, often demanding that money be paid upfront with the promise of a big settlement in a short amount of time.
- Identity Theft: One of the most frequently executed types of fraud in this age, identity theft mugs victims of their money, credit rating, and personal identity. Impostors obtain credit cards, bank accounts, and other personal information, using them for personal gain.
- Credit card Fraud: In today’s environment of automated transactions, credit card fraud has become a dominant crime. By gaining people’s credit card information, through a variety of resources, the criminal can rapidly make a large amount of purchases before the consumer even comprehends what is happening. Credit card fraud is categorized as identity theft, identity assumption, or a fraud spree, depending on the particulars of the criminality.
- Insurance Fraud: Insurance fraud is committed every day by people who otherwise would not consider themselves to be lawbreakers. Incorrect or inflated insurance claims for automobile damages, health care expenditures, and homeowners or renters insurance are considered to be insurance fraud. They may be charged as crimes, depending on the circumstances and volume of the fraud.
Fraud Prevention and Warning Signs
- Phone calls in which the caller asks for money to be sent in exchange for an offer.
- Phone calls in which the caller asks for a social security number (even if they only request the last four digits).
- Phone calls in which the caller asks for personal information, including a bank account or credit card number.
- Receiving unsolicited mail or emails requesting the person send money with the threat that he may lose their credit cards or driver’s license if they do not obey.
Possibly the most significant personal policy to protect yourself against fraud is to never provide personal information over the phone, mail, or email. A respectable bill collector, bank, or loan company will never demand money upfront. If a person receives an offer or a demand for payment, they should look up the corporation’s contact information on their own, contact the establishment directly, and check with the Better Business Bureau in their state to ensure the company is authentic. When retailing an item of large value, an individual should also appeal a cash payment to avoid check or wire fraud.
Keeping these warning signs in mind, an individual can prevent fraud by timely detection of fraudulent activities.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.