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Businesses Are Getting Better At Preventing Fraud, But The Scammers Are Catching Up

compression.org

As technology and procedures that protect businesses advance, people trying to scam your business are not far behind. Experts are trying to educate business owners about protecting themselves from fraud.

Crystal Low, the executive vice president and director of corporate services of Zion’s Bank, said one of the reasons fraud occurs in businesses is because owners don’t have sufficient safeguards in place to protect their finances.

“One of the biggest ways that we can protect our businesses is with our people and educating our employees on things they should and should not be doing, having proper controls - checks and balances in place is critical,” Low said.

Fraudsters target all types of business, Low said, but employees are the main source of fraud. She said people who have worked with the company for many years and even family members are usually the ones who embezzle money.

“If you look at the Association of Certified Fraud Examiners, they report that 77% of all fraud incidents involves employees – and the average scheme goes on for 18 months before it’s detected,” Low said. “Those statistics go to say there’s really no room to not have those in place.”

Low said business owners shouldn’t give anyone the opportunity to make the wrong decision.

“The conversation you have with your employees is these are in place to protect you and to protect us,” Low said. “And quite frankly if you have somebody that’s pushing back against that - that should be a red flag.”

Communication is key for business owners. Low said staying in touch with banks and working with them when business changes occur is a good way to stay proactive. Communicating with employees about procedures and safeguards will help avoid internal problems. She said unfortunately many business owners don’t think about safeguards until something bad happens.

“We need to be looking a risk management as a core part of your business and having strategic conversations up front,” Low said. “Be proactive. Don’t wait until it happens to you, because when it does, sometime you can’t recover from it. I can’t stress that enough.”