In a 2014 study, the association found that the median loss attributed to fraud was $145,000. To make matters worse, nearly 60% of the companies in the study that were victims of fraud failed to recover their losses, while only 14% recovered them in full.
At the same time, if corporate counsel and company management aren’t careful, mishandled investigations into suspected wrong-doing can cost them exponentially more in lawsuits. Here are five best practices for combating workplace fraud and minimizing a firm’s losses:
- Assemble a team of professionals external to the firm – preferably a Certified Fraud Examiner, computer-forensics expert and white-collar criminal attorney.
- Safeguard data contained in computers and electronic media, as well as a suspected employee’s workspace and office area. Leave the investigation to the experts so as not to compromise any potential evidence.
- It may be counter-intuitive, but don’t rush to dismiss employees suspected of wrong-doing. It’s easier to investigate them while they’re still on the payroll.
- Deactivate passwords to deny access to corporate information systems. Disgruntled employees can do significant damage, and relatively quickly.
- Notify your insurer as soon as you suspect wrong-doing, as there may be a notification provision and specific time frames for documenting and reporting losses.