Internal Fraud at Work and 4 Tips to Prevent It
Internal fraud can be a major issue in any organization. Even if you have the best people and processes, there are always ways for fraudsters to take advantage. Many organizations have some form of an internal fraud prevention program, but it’s often not enough.
Here are some common methods that fraudsters use, among a long list of others:
- Creating fake purchase orders or invoices
- Making duplicate payments or reimbursements
- Falsifying expense reports
- Pocketing money from the petty cash fund
- Keeping Intellectual Property on personal devices for future use
- Taking home office supplies and/or “misplacing” IT equipment
Internal fraud can happen to any business, large or small. The best way to prevent it is to know where your weaknesses are and make sure that you have the right policies in place to ensure your employees understand what’s expected of them.
4 Tips to Prevent Internal Fraud at Work
If you’re concerned about internal fraud in your workplace, here are 4 tips to help keep your business secure.
1. Implement Data Destruction Procedures
Protecting your company’s data from internal theft requires a multi-pronged approach that includes both physical and digital security measures.
One way to prevent insiders from stealing sensitive information from your network is by implementing data destruction procedures that require employees to destroy all hard drives before they leave the company or are terminated.
If you don’t have a data destruction procedure in place yet, start implementing it today. This implementation will ensure that only authorized personnel have access to sensitive information and that if someone leaves your company suddenly, they won’t be able to take anything with them when they go.
2. Audit Your Records Regularly
Make sure there are regular checks of how much money is coming into the company and where it’s going out. This investigation will help you spot any unusual activity quickly and take action before it becomes a serious issue.
You’ll also want to keep an audit of your IT devices that contain any data (computers, tablets, cell phones, external drives, etc). Check that all devices are where they should be on a regular basis. Any devices that are near their end-of-life or with an employee who is leaving soon, should be monitored closely and securely transitioned or disposed of properly.
3. Encourage Reporting of Suspicious Activity
Internal fraud often goes undetected because employees don’t feel comfortable reporting it. The first step in preventing this type of fraud is encouraging employees to report any suspicious activity or behavior they see or hear.
If you have an anonymous tip line, make sure to promote it so that employees know how important it is for them to come forward with their concerns.
4. Encrypt Your Data
Encryption is one of the best ways to protect against internal fraud because it makes it more difficult for an employee to steal sensitive data. When you encrypt your data, it becomes impossible to read without access to the decryption key — even if an employee steals everything on your computer or server and tries to access the data.
Keep Your Company Safe from Internal Fraud with SEAM Services
If your company is located in North Dakota or South Dakota near Sioux Falls, consider SEAM Services to help manage your data.
With our data destruction options, we can help keep your business safe from internal fraud by getting ahead of potential issues before they arise. To learn more about our services or to get a quote, send us a message today!