Five Ways to Protect Your Organization from Fraud

Nov 14, 2018

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Emmie Madison
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Fraud has increasingly become a part of everyday life for individuals and businesses with the methods becoming more sophisticated each year. In fact, 63% of businesses said they experienced the same or more fraud losses in the past twelve months according to a 2018 Global Fraud Report by Experian. As such, Public Trust Advisors, LLC (Public Trust) has compiled the top five ways from industry experts to predict, prevent, and protect your organization from fraud.

1. Maintain and update your policies and procedures and make sure they are being reviewed.

Consistent and accurate policies and procedures will not only save you time but potentially eliminate the fraud risk associated with errors and dishonesty. Be sure to incorporate processes that identify potential risks and provide a way for employees to report fraud or error. It is often best to allow employees to report fraud anonymously as to reduce stressful situations.

2. Use a checks and balances system for processes, particularly processes that are at risk of fraud.

If possible, there should always be more than one person handling money, transactions, banking changes, and other financial activities. Additionally, we recommend that local governments have more than one authorized signer on an account and that multiple people receive statements and transaction confirmations to provide added layers of security.

3. Be aware of and education on email spam, phishing scams, and malware.

Employees should receive regular trainings on the ways to identify suspicious emails. There are also a number of free resources that can help anyone brush up on their fraud detection skills including phishing quizzes that use realistic email examples with interactive tips on fraudulent links and attachments.

4. Do not allow employees to share login information or passwords.

When login credentials are shared, it is difficult to track individual actions and provides no audit trail. Only provide logins or other authorizations to those employees who require them. Wherever possible, use activity logs to monitor potential inappropriate or unauthorized access. For Public Trust Participants, MYACCESS offers dual factor authentication which ensures that security questions must be answered if a login somehow falls into the wrong hands to gain access as an added layer of safety.

5. Use technology to your advantage whenever possible.

Distance your local government from the use of checks if possible, particularly the practice of sending checks by mail. The best-case scenario from a fraud standpoint is the use of direct deposit or a similar service because  it avoids the unnecessary risk of checks being lost, or worse yet stolen, in the mail.
While no organization will ever be completely risk free or fraud proof, taking precautions and preparing your employees can help reduce the opportunity for, as well as the amount of, fraud. For more information about how Public Trust helps to protect local governments from fraud, please do not hesitate to contact a Public Trust representative.  
Source: Experian Information Solutions, Inc. (2018). The 2018 Global Fraud and Identity Report. Retrieved from https://www.experian.com/assets/decision-analytics/reports/global-fraud-report-2018.pdf
The information presented should not be used in making any investment decisions and is not a recommendation to buy, sell, implement, or change any securities or investment strategy, function, or process. Any financial and/or investment decision should be made only after considerable research, consideration, and involvement with an experienced professional engaged for the specific purpose. All comments and discussion presented are purely based on opinion and assumptions, not fact. These assumptions may or may not be correct based on foreseen and unforeseen events.

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