It would be reasonable to think that fraud prevention would fall under police responsibility, yet it does not.  Although the police are the best at preventing frauds, and many police departments around the world do affirm their role in fraud prevention, the situation on ground is very different.

As a former accountant police officer and now a fraud expert, Bar Lev said," I am speaking out of experience and out of hurt, because when I was in the police the problem of returning the money back to the victim did not interest me, even more so, in case of fraud… it may even be the case that I try to transfer documents to external sources and I simply cannot, because the police may hold them for investigation until the case is closed which can take even 2-3 years". The fact is, that often the police will not be able to give the victim what he really wants back, which is the money, not the punishment. Unlike physical hurt where a person cannot undo what has already been done, when dealing with money there should be no problem to return what has been lost. Secondly, and more importantly is policemen’s priorities when dealing with fraud; it seems that the bigger the fraud is, the more of a priority it becomes. Hence, a paradox emerges as police try to catch a thief who stole $1 million dollars, and leave the thief who stole $100 dollars because they try to prioritize according to fraud intensity; they are actually not targeting the problem in the system itself, because that same thief who just stole $1 million was once a thief who began with only $100.  And so, these limitations within preventative systems such as police departments demonstrate a painful ending.

Usually we are dealing with companies and firms. An average fraud of an employee is approximately $4,500 per year, so a firm with 100 employees, the company can possible have an average damage totalling almost half a million, and this amount should in turn be the minimum amount a company spends on fraud prevention. The key is therefore to prevent the fraud from even happening, or to eliminate it right from the beginning; this is where the human factor comes into play: 40% of frauds are conducted by managers, because their access to control and information is better. The best way to counter frauds happens to be very surprisingly, other workers or close friends/family which rat on their close friends. Thus, it is important to provide those that tell, better protection and incentives- anonymity, compensation, and explain to them the contribution they are providing by securing their own work place and by keeping it clean.

So what might motivate an employee to commit an act of fraud? We can never know all the types of motivation a person may have; even a person who might seem happy at work, could be abused at home and pressured to bring more money to the house. Therefore, not always can an employer have control over the environment his employees are exposed to, but the more we understand the mind of the employee the more we can control the motivation. Yet what an employer could control is the access employees have to important data or valuable goods. Moreover, an employer should make sure there are no loopholes in the system that could serve as a window of opportunity for a fraud; the population in the workplace, according to Bar Lev, is composed of 3 distinct groups: 25% criminals, 25% just people, and 50% of the population are persons who are undecided. That 50% of the population is the most dangerous, because their behaviour is unpredictable, and it is hard to therefore determine what motivate them. Keeping the workplace access limited and system efficient is therefore very important.

What’s the solution? Well, there is no specific cure for fraud offences, yet there are some pre-emptive steps that could help prevent such actions from occurring. The first, is every six months, each employee should undergo a personal meeting with his supervisor. In these meetings the employee can criticise and discuss issues he has with the company or anything surrounding his work. Meeting for just half an hour, gives the employer a chance to sense any abnormal behaviour that may lead a person to eventually commit fraud. Second, is account management; an employer should always follow up and check reports that managers submit.  The third, and biggest factor, are the suppliers and customers; the information they have about the company and their prospective, may give good information about frauds in the company.

There is a theory, Bar Lev explained, “a theory of cockroaches. If we find a cockroach under the sink and we squeeze it, we will make it multiply because we did not only not solve the problem but we again ignored it, and therefore, every time there is a fraud it is not enough to solve the immediate problem, you must deal with the infestation”.

PURCHASE THE ONLINE SECURITY MANAGEMENT COURSE

PSOSONLINE© All rights reserved. Reproduction in whole or in part prohibited without the prior written consent of PSOS.