Whether stolen assets include cash, products, raw materials, or personal property, many business operators are satisfied with what they consider an “acceptable” level of loss. In fact, they refer to this level as a cost of doing business.
The cost of investigating a fraudulent loss and obtaining legal evidence is probably incidental compared to the amount stolen in many cases of fraud. Theft of proprietary information is even more severe because it could affect the business’s future. Compared to that of protecting business data, the cost of security measures, such as encrypting sensitive data and installing covert security cameras, is negligible.
How to Increase Fraud Prevention and Protection Measures
So what should a business do to increase its fraud prevention?
- Establish an anti-fraud policy to illustrate that, among other things, employees who commit fraud will be fired and prosecuted to the full extent of the law. In some cases, a company may use this policy to mandate that a perpetrator repay the cash value of all losses in full – even if it has full insurance coverage. This mandate may be more of a threat than termination.
- Make it clear to vendors, suppliers, and consultants that if their employees are involved in thefts affecting the business, they will be held responsible for all fraudulent losses.
- Make it the employees’ business to stop business fraud before it impacts the company.