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December 15, 2011

Communication: Best Way to Prevent Fraud (and it’s Free!)

Filed under: Communication,Compliance10:45 am

Years ago when I worked as a young teller, I can remember how strict bank policy was with regard to safeguarding customers and the bank itself.  The bank took care to secure its assets and protect against theft – internally as well.  We practiced “dual control,” for transfers among general ledger accounts, for example.  Even with those preventive measures, there were still stories around the water cooler of employees who had embezzled money from the bank.

Occupational fraud – embezzling, theft, or misuse of resources – is a concern year-round.  The added pressure of holiday stress could present the missing catalyst that propels an employee to commit fraud when they otherwise might not.

Of course, you have taken precautions, such as exercising “dual control” and locking things up around the office, but Teresa Bengston writes that you may be missing something in your measures: accounting for the fact that your employees are human.

She suggests some best practices to reduce fraud, especially during the holiday season:

  • Communicate with your employees – Make it a point to go over policies and procedures that are in place to prevent fraud.  If they see anything of concern, they should notify management.  Use every channel available to communicate with employees to be sure they receive the message.
  • Teach employees to identify concerns among their coworkers and help them understand the true cost of fraud and how it relates to their job.
  • Use your Employee Assistance Program or another source to offer help to employees who are struggling – the holidays are stressful and can be more so with added financial pressure.

As the economy shows sluggish signs of a gradual recovery, no organization can afford the extra drain of fraud, especially when low to no-cost ways of helping prevent it are as simple as communication.

Read more: Avoiding Occupational Fraud during, after the holidays


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