Detecting fraud is incredibly difficult. After all, an act of fraud is an act of intentional deception, and the purpose of this act is to keep the victim or victims from realizing they have been defrauded. It is for this reason that vigilance is necessary on the part of potential victims of fraud, especially business owners, insurance companies and banks. Though there are certainly industries that are more prone to fraudulent behavior than others, it is still important to realize that acts of fraud occur in any number of circumstances and are often committed by the unlikeliest of perpetrators.
Detection Depends on the Nature of Your Organization
The organization with which you are involved will help determine how to best detect fraud, as certain types of organizations see specific types of fraud that require different methods of detection. A bank, for example, should be using some sort of analytical software that identifies potential fraudulent activity in need of further investigation. An insurance company, on the other hand, may have to rely on investigative measures to uncover insurance fraud. Other organizations should consider the type of fraud that is most likely and create individualized protections based on the nature of its operations.
There Is No Immunity to Fraudulent Activity
The typical statistic that is thrown around notes that five percent of annual revenue is lost to fraud, and that this percentage applies to organizations of every size. For small businesses, the common belief is that there is a smaller likelihood that they will be victimized by fraud, but this is simply not the case. A small business is just as likely as a larger organization to be defrauded, and even the most loyal of employees and the most thorough of inspectors will not uncover the fraud that occurs. Additional measures are necessary to prevent fraud for every type of organization, even the small businesses that mistakenly believe they are immune.
Prevention Is Key
There are methods available for recuperating losses stemming from fraudulent behavior, but it is also widely understood that civil action and criminal proceedings require a high standard of evidence and simply cannot guarantee any remuneration to the victim or victims. Even if a civil suit is successful, the process is lengthy and can be quite costly, so the best option for all organizations is to utilize effective preventive measures to deter fraudulent behavior in the first place.