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Why should you read this guide?

Unfortunately business fraud is on the increase and a constant possibility you need to be aware of. The problem with business fraud is that is it often covered up by the business owner so you do not hear of as many instances as you should. Vigilance is important and this guide will explain the most common types of fraud and what to look out for.

Background

Like most crime there is a general feeling of "it won't happen to me". However many businesses each year are victims of fraud. Business owners do not report all instances of fraud because as well as the obvious financial loss that will occur there can also be a number of non-financial effects on a business, including:

• Lowering of staff morale
• Adverse publicity about the company
• Serious disruption (and sometimes financial cost) to the business caused by the investigation

The most reported fraud cases tend to be in banks where staff have easier access to money and can come up with elaborate schemes to procure it for themselves. Computer systems now make it easier for intelligent fraudsters to commit fraud. This threat can come from inside or outside your business.

Staff

The fact is that we need to delegate to someone in business as we cannot do everything ourselves. That means you need to trust your staff and make sure, as much as possible, that they are trustworthy:

• Always ask for and check references for every member of staff no matter how senior
• Ensure all staff take regular holidays, as long term frauds take constant attention
• Always ensure line managers are knowledgeable about their staff and the areas they control. Ensure you know what your senior staff are doing
• If you suspect someone of fraud do not simply fire them as this may end up in a tribunal without evidence on your part. Contact your local crime prevention unit instead

Customers and suppliers

Remember that it is possible to lose money to customers or suppliers to your business: