In the right hands, modern technology can be a tremendous asset to the business community, stimulating business growth and advancement. In the wrong hands, this same technology can be used against businesses by exposing them to the dangers of business fraud. Modern computers, printers and scanners have greatly simplified the process of altering and falsifying personal and business documents. This has resulted in a dramatic increase in document fraud.
What is Document Fraud?
Document or identity fraud has been defined as the “manufacture, sale or use of counterfeit identity documents.” Documents that have been fraudulently made include I.D.s, birth certificates, employment records, driver’s licenses, police certificates, passports, travel documents, visas and diplomas. Through document fraud, individuals can steal the identity of others for personal gain or create a completely new identity to cover up information from their past. It’s not uncommon today to discover individuals using identity fraud to hide criminal backgrounds, obtain visas to enter countries illegally, gain employment in companies under false pretences and more.
How dangerous is Document Fraud?
Hiring individuals with falsified documents poses a great security risk for your business as they can cause a great deal of damage within a short amount of time. Without an anti-fraud screening process or background checks, your company runs the risk of hiring people with questionable backgrounds and work habits. One dishonest employee with access to your business accounts can cause substantial financial loss to a small business in as little as one to two years. This is on average how long it takes to detect fraudulent activities.
Through large scale fraud, your company could lose hundreds of thousands of dollars of financial profits. Such losses could easily close down certain aspects of your business or force you to let valuable employees go. Along with loss of financial income, business fraud can result in the theft of sensitive data essential to the operation of your business. Data theft is a very real problem in business today, which is why many companies go to great lengths to secure their vital information.
Internal business fraud has the potential to cripple a company’s operations and hinder its future growth and expansion. No company is completely exempt from the possibility of fraud; small and large companies alike have suffered from this dilemma. Recognizing the dangers of fraud should prompt your company to adopt anti-fraud measures to protect your assets. In addition to vital information, finances and material possessions, your work force is one of your greatest assets. Instances of fraud within your business can have a devastating effect on honest employees who are investing their future into your enterprise. It could cause employees to lose confidence in your business, putting a damper on productivity and morale.
Combating Business Fraud
There are many ways in which businesses can fight against fraud and protect their interests. The following provides some insight into measures that can be taken to minimize these attacks.
- Install surveillance systems where needed to boost security and protect your employees
- Limit employee access to sensitive data and store in a safe, secure place.
- Encrypt all confidential business files, personal information, etc. on your computers.
- Conduct background checks on new employees to include identity verification, past employment, references, etc.
- Dispose of confidential business information by burning or shredding.
- Make sure your company’s IT security covers mobile phones, laptops, Internet usage and email.
- Review financial records often to include auditing business checks and reconciling statements to verify all is in order.
- If you utilize computer checks, only use checks that have the required security features to avoid check fraud.
- Set rigid controls within your accounts payable department to help detect invoice fraud.
- An automated invoice management system in your finance department can serve to discourage fraudulent activity.
- Institute guidelines for data protection and ensure employees adhere to your policies.
While there is no way to guarantee that your business will never be harmed by document fraud, these measures can help to greatly reduce the harmful effects fraud can cause. Protecting your business from document fraud is a worthwhile investment that can help preserve your company’s integrity and profitability now and into the future.