Quick Tips For Fraud Prevention:
› Store Checks in a secure location.
› Destroy unused checks from closed accounts immediately.
› Buy high security checks with overt and covert security technology
› Choose signature delivery required for shipment of checks.
Facts about Fraud:
Information gathered from the 2010 Report to the Nations on Occupational Fraud and Abuse, (Conducted by the Association of Certified Fraud Examiners).
› Small business is disproportionally victimized by occupational fraud. These organizations are typically lacking in anti-fraud controls, which makes them particularly vulnerable to fraud.
› Anti-fraud controls appear to help reduce the cost and duration of occupational fraud schemes.
Link for Organizations in General:
› Occupational Fraud is classified in three categories, Asset Misappropriation, Corruption and Financial Statement Fraud; Asset Misappropriation is the most frequent (over 89.8% of the cases) with a median loss of $100,000.
›To further delineate, Asset Misappropriation, in the study was further broken into 8 subcategories, check tampering being one of those categories. According to the study the Median time before a business detects check tampering is 24 months.
› As a percent of all cases associated with Asset Misappropriation, 13.4% are attributable to check tampering and the median loss for these cases is $131,000.
› A tip rather than audits, reconciliations, monitoring or surveillance most often detects occupational fraud. 40% of all cases detected are via tips.
› While tips have consistently been the most common way to detect fraud, the impact of tips is, if anything, understated by the fact that so many organizations fail to implement fraud-reporting systems. Such systems enable employees to anonymously report fraud or misconduct by phone or through a web-based portal.6 The ability to report fraud anonymously is key because employees often fear making reports due to the threat of retaliation from superiors or negative reactions from their peers. Also, most third-party hotline systems offer programs to raise awareness about how to report misconduct. Consequently, one would expect that the presence of a fraud hotline would enhance fraud detection efforts and foster more tips.
Link for Small Business in Particular: (<100 Employees)
› As a percentage of all cases associated with Asset Misappropriation in small businesses, 26.1% are attributable to check tampering.
› Only 15% of small businesses had a hotline in place, compared to 64% of larger organizations. Research shows that hotlines are consistently the most effective fraud detection method.
› The median loss for frauds at companies with hotlines is 59% smaller than the median loss for frauds at organizations without such a mechanism. Arguably, enacting hotlines would go a long way in helping small-business owners protect their assets from dishonest employees.
Fraud Facts for Organizations of All Sizes:
Occupational Fraud is classified in three categories, Asset Misappropriation, Corruption and Financial Statement Fraud:
› Asset Misappropriation is the most frequent (over 89.8% of the cases) with a median loss of $100,000.
› Perhaps most concerning is that only 15% of small businesses had a hotline in place, compared to 64% of larger organizations. As previously discussed, our research shows that hotlines are consistently the most effective fraud detection method. The median loss for frauds at companies with hotlines was 59% smaller than the median loss for frauds at organizations without such a mechanism. Arguably, enacting hotlines would go a long way in helping small-business owners protect their assets from dishonest employees.
Fraud Deterrent Tips
› Reconcile checks and accounts promptly.
› Know how many checks you ordered, verify your order and the accuracy of the information on your checks.
› Treat checks like cash. Consider one of Blackbaud's locking check storage boxes for additional security.
› Consider adding text over the signature to void checks after 30 days. Do not replace lost checks until the original is void.
› When signing or completing a check with ink, use Blackbaud Forms' security gel pen which cannot be washed from the check with chemicals.
› Destroy unused checks from closed accounts immediately.
› Buy high security checks with overt and covert security technology, such as our Guardian Plus and Guardian high security checks.
Tips to Prevent Internet Fraud
› Know who you're dealing with. If the site is unfamiliar, check with your state or local consumer protection agency and the Better Business Bureau. Get the physical address and phone number in case there is a problem later.
› Look for information about how complaints are handled. Look on the Web site for information about programs the company or organization participates in that require it to meet standards for reliability and help to handle disputes.
› Be aware that no complaints is no guarantee. Fraudulent operators open and close quickly, so the fact that no one has made a complaint doesn't mean that the seller or charity is legitimate.
› Understand the offer. A legitimate seller will give you all the details about the products or services, the total price, the delivery time, the refund and cancellation policies, and the terms of any warranty.
› Resist pressure. Legitimate companies and charities will be happy to give you time to make a decision. It's probably a scam if they demand that you act immediately or won't take "No" for an answer.
› Be cautious about unsolicited emails. They are often fraudulent. If you are familiar with the company or charity that sent you the email and you don't want to receive further messages, send a reply asking to be removed from the email list. However, responding to unknown senders may simply verify that yours is a working email address and result in even more unwanted messages from strangers. The best approach may simply be to delete the email.
› Beware of imposters. Someone might send you an email pretending to be connected with a business or charity, or create a Web site that looks just like that of a well-known company or charitable organization. If you're not sure that you're dealing with the real thing, find another way to contact the legitimate business or charity and ask.
› Beware of "dangerous downloads." In downloading programs to see pictures, hear music, play games, etc., you could download a virus that wipes out your computer files or connects your modem to a foreign telephone number, resulting in expensive phone charges. Only download programs from Web sites you know and trust. Read all user agreements carefully.
Identity Theft Victim Tips
You can get detailed advice by calling the Federal Trade Commission's ID Theft Clearinghouse toll-free at 877-438-4338 or going to www.consumer.gov/idtheft. You can also provide information about your problem, which will help law enforcement agencies investigate and track ID theft. The FTC will send you a free booklet, "ID Theft: When Bad Things Happen To Your Good Name," or you can get it online. There are other steps that you might want to take right away.
› If you believe that someone is using your identity illegally, report the crime to a law enforcement agency. It isn't always possible for agencies to investigate every case, but making an official "identity theft report" can help you solve problems resulting from the ID theft. The "identity theft report" must be a document that subjects the person filing it to criminal penalties for providing false information. This is intended to discourage people from filing phony reports to try to avoid paying legitimate debts, not to prevent legitimate ID theft victims from reporting the crimes. You can report the crime to:
› Your local police
› A state or federal agency, including the U.S. Postal Inspection Service (do not use a complaint to the FTC as an official identity theft report).
› When a financial account is involved, contact the bank immediately. If your credit card, debit card, ATM card, or checks have been lost or stolen, or if you suspect that someone has obtained your account number for fraudulent purposes, inform the financial institution promptly and ask what you need to do to protect your money.
› Know your payment rights. Under federal law, you are not responsible for more than $50 if someone uses your credit card without authorization, and most issuers will remove the charges completely if you report the problem as soon as you discover it. While your losses could be greater if someone uses your debit card, the card issuer may have a policy that offers you more protection than federal law provides. You can contest checks that have been used with your forged signature or unauthorized withdrawals from your bank account.
› Respond quickly to debt collectors. If debt collectors contact you about accounts opened in your name or unauthorized charges made to your existing accounts, respond immediately in writing, keeping a copy of your letter. Explain why you don't owe the money and enclose copies of any supporting documents, such as an official identity theft report. You have the right to ask the debt collector for the name of the business that is owed the debt and the amount owed. And you have the right to ask that business for copies of the credit applications or other documents relating to any transactions that you believe were made by the ID thief.
› Put a fraud alert in your credit files. This will oblige creditors to take extra precautions if someone applies for credit in your name to verify that it's really you. There are two kinds of fraud alerts. An "initial fraud alert" does not require you to provide a copy of an official "identity theft report" and stays on your credit records for at least 90 days. This is the kind of alert to use if you think you might be a victim but you're not sure - for instance, if you lost your wallet or you find out that someone has gotten access to the customer records at a place you do business. An "extended fraud alert" should be placed when you have reason to believe that someone has illegally used your identity. You must provide a copy of an official "identity theft report" to request an extended fraud alert, which will stay on your credit records for 7 years. If you put an initial fraud alert on your files, you can always request an extended alert later if the situation warrants it. Just contact one of the three major credit bureaus to place the fraud alert; it will be shared automatically with the other two: Equifax, 800-525-6285, TDD 800-255-0056, www.equifax.com; Experian, 888-397-3742, TDD 800-972-0322, www.experian.com; TransUnion, 800-680-7289, TDD 877-553-7803, www.transunion.com.
› Get free copies of your credit reports. When you file a fraud alert, the credit bureaus will contact you with information about how to get free copies of your credit reports. If you filed an initial fraud alert, you are entitled to one free copy of your credit report from each of the bureaus. If you filed an extended alert, you will be able to get two copies from each of the bureaus, one right away and the other within 12 months. This will help you monitor your account for problems. Since the information at the credit bureaus may be different, be sure to get your reports from all three.
› Follow the instructions to dispute any accounts you didn't open, charges you didn't make, or other information that isn't accurate. Be specific about any information that you believe is the result of the ID theft. You can permanently block that information from your credit files; you will be asked for a copy of your official identity theft report to do so. As with fraud alerts, you only need to report problems with your credit reports to one of the bureaus, and it will share that information with the other two (see contact information above).
› Keep checking your credit report regularly. A new federal law entitles all consumers to ask each of the three major credit bureaus for free copies of their reports once in every 12-month period. This free annual report program started in late 2004 and is being phased in gradually across the country, from West to East. Go to www.ftc.gov/credit or call 877-382-4357 for more details and to see when you can make your requests. You don't have to ask all three credit bureaus for your reports at the same time; you can stagger your requests if you prefer. Do not contact the credit bureaus directly for these free annual reports. They are only available by calling 877-322-8228 or going to www.annualcreditreport.com. You can make your requests by phone or online, or download a form to mail your requests.
› Your state law may also entitle you to free credit reports. Ask your local consumer protection or state attorney general's office. Any rights your state law gives you are in addition to your rights under federal law.
› Be cautious about offers for credit monitoring services. Why pay extra for them when you can get your credit reports for free or very cheap? Read the description of the services carefully. Unless you're a victim of serious and ongoing identity theft, buying a service that alerts you to certain activities in your credit files probably isn't worthwhile, especially if it costs hundreds of dollars a year. You can purchase copies of your credit reports anytime for about $9 through the bureaus' Web sites or by phone: Equifax, 800-685-111; Experian, 800-311-4769; TransUnion, 800-888-4213
Internet Fraud Tips from the National Consumers League's Internet Fraud Watch