Fraud is a major economic burden throughout the US and around the world, with annual costs spiraling into the trillions.
Because it is so rife, businesses cannot afford to stand idly by while the threat of fraud goes unchallenged.
The first step is to get to grips with the various tactics and points of vulnerability that fraudsters will target, so here are the main examples you must recognize and defend against right now.
Hiring a criminal defense lawyer to defend against a fraud accusation
Before we go any further, it is worth pointing out that businesses can also be stymied by fraud accusations leveled against them, whether by competitors, consumers or any other third party.
The solution is to act swiftly and work with an experienced criminal attorney, like those who work at Jonathan Marshall law offices NJ. This is not just about deflecting false accusations, but also about preserving and restoring the reputation of your business, rather than allowing it to be tarnished unfairly.
At the moment around 40 percent of fraud originates internally, according to a recent survey from PwC. This means that while external threats are an issue, businesses also need to be aware of the risks posed by their own employees.
Asset theft and accounting fraud are the most widely perpetrated insider examples, although employees are also the only ones capable of certain other types of fraud, such as making a false insurance claim for a workplace injury, accident or other claimable event.
The best solution is attention to detail and vigilance. The more you look into accounts and check that every transaction is legitimate and above board, the less likely it is you will overlook underhanded activities carried out by emboldened employees.
There are many subcategories to customer fraud which you need to be aware of, many of which are industry-specific.
For example, if you operate a retail business, then returns fraud is a priority to monitor and prevent. This can happen when an item is purchased online or in-store, and customers attempt to claim cash back or take duplicate items illegitimately.
False insurance claims and liability issues can also crop up in a customer fraud context, so again it is about looking into the risks you face in your organization, and getting the expert advice you need to minimize them.
You also need to be proactive about attempting to decrease false positives from any fraud detection strategies you roll out to protect your business. This is particularly relevant when it comes to payment card fraud, and there are several factors at play here, from human error to the limitations of automation.
The most prevalent form of third party fraud committed against businesses in the modern age is cyber fraud, with criminals making use of the web to target and victimize organizations of all sizes.
Identity theft should be a concern for companies, especially in the case that your brand is exploited to mislead prospective customers, such as in the form of a phishing site or fake email marketing campaign.
Even if you had nothing to do with such criminal endeavors, your reputation could suffer by association.
Data breaches and ransomware attacks also fall under the broad umbrella of cyber fraud, and a record-breaking number of businesses have had to pay out bribes to cybercriminals in order to restore access to mission-critical data and IT services in the past year.
There are a few ways to sidestep the worst of the cyber fraud epidemic, most notably through a combination of using the right security tools and the correct level of training to ensure employees follow best practices.
Defending against fraud and protecting your brand from being accused of fraud are the yin and yang of the modern business world.
Even small organizations have to be savvy about these matters, and hopefully you now have an idea of how to better protect yourself.