Fidelity Insurance - What is it?
Being the victim of fraud is unnerving for business at any time. Not only can it impact on the business financially it can damage the reputation of an organisation. The recent siphoning off of $20 million from Clive Peters by an employee highlights how large an issue it can be. Unfortunately the probability of fraud being perpetrated is much higher in times of recession.
It is difficult to accurately profile fraudsters but based on statistics from KPMG, the typical criminal is a 38 year old male who has been employed for at least six years and held the same position for around four years. Usually working in finance or sales, he is motivated by greed and often has some kind of addiction.
Before painting every employee as a potential criminal, it should be noted that an employee may commit an error which, if detected, can be easily explained as a mistake. Unfortunately if appropriate controls are not in place and the matter goes undetected, an employee may, after realising the personal gain, take advantage of the control breakdown and continue to deliberately repeat the error.
Some prevention strategies include:
- Review and improve internal controls
- Develop codes of conduct
- Train managers and other staff in fraud awareness
- Screen all new employees
- Perform due diligence on suppliers and business partners
Fidelity insurance protects an organisation from the loss of money, securities or inventory resulting from dishonest acts of your employees.
Fraud is not a victimless crime. The costs can be high, so prevention is paramount to running a successful business.
"This article provides a factual summary only of the product(s) we offer. It is not intended to be advice and you should not rely on it as a substitute for any form of advice"
