Gambling and Embezzlement – It’s That Time of Year

November 21, 2014 by Leave a Comment

theft (2)Anyone with a business knows the holidays bring a distinctive set of challenges. For many owners one of the biggest is the increased risk of loss and fraud through consumer theft. Other owners are relieved that they aren’t in those kinds of businesses and believe that they don’t need to “worry about all that stuff”. But, they forget about or ignore employee theft.

All businesses are subjected to the increased possibility of theft around this time of year. The holidays are exactly the time to monitor employees and financials for signs of embezzlement. There are a few reasons why incidents of embezzlement are more likely to start or increase now. One of them, that’s regularly overlooked, is gambling addiction.

The Marquet Report on Embezzlement is the culmination of a 5 year study which looked into employee misappropriation. It found that gambling addiction is one of the top 2 reasons people embezzle. Therefore, it’s important for an employer to be aware of this issue and to know what to look for, especially now.

For most people increased stress is a given in the months of November and December. Gambling addicts respond to stress by gambling more and when they gamble more they lose more. They then gamble more to try to cover their losses, get back to even, or hit the big score. This leads to more losing and the cycle continuing. Inevitably, they run out of money and accumulate debt they can’t repay.

Because of the season money irregularities can become more pronounced in their domestic situation, triggering more stress, lies and gambling. Gambling addicts will go to drastic measures to cover up their addiction. Now, feeling more pressure, they may embezzle for the first time or steal larger amounts.

But, this doesn’t happen in a vacuum, there’re always signs along the way that something is wrong. Some of the signs to look for include the following.

  • Giving flimsy excuses or lying about absences during the day. This can be more pronounced in areas where there’s a gambling venue.
  • Inappropriately defensive or dishonest when talking about spending habits or income.
  • Asking for advances on pay and/or frequently borrowing money from co-workers.
  • Excessively talking about and showing interest in gambling games, venues, beating the system, odds, etc.
  • Suspiciously guarded and controlling of the company’s financial records.
  • Taking financial work home, even though there’s time to do it during the business day.
  • Insisting on being in charge of bills, invoices, payments, receivables, dealing with vendors, etc.

Embezzlement can emotionally and financially devastate an organization. At best it‘s a violation of trust and at worst it can cause a business to go bankrupt. Nobody likes to think about or have trouble this time of the year, but a good manger doesn’t ignore problems no matter what the season.

Nicole Abbott – writer, educator and psycho-therapist

 

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What Is Your Return Policy This Holiday Season?

November 7, 2014 by Leave a Comment

theft (13)Many stores around the country accept returns without a receipt. Some have date restrictions, or a credit transaction look up if you do not have the receipt, but others let you exchange or return merchandise with only an id. Wal-marts’ policy time restriction is 90 days with some exceptions with electronics, otherwise you can get a cash refund for purchases under $25 dollars or store credit for purchases of over $25. Target, office Depot, Lowes, Kohl’s and other stores do not require a receipt, although they can look up the transaction with your membership or credit card transaction. Making your policy clear on purchases this holiday season can save your business money and avoid the confusion with your employees about the return policy of the store. For more information about shoplifting, follow the links below.

Shoplifting suspect arrested after running out of gas during chase

The Atlanta Journal-Constitution

Snellville police nabbed a suspected serial shoplifter earlier this week after a harrowing chase through five jurisdictions that ended when the suspect ran out of gas.

Carl Ashley Thompson, 30, of Ball Ground, was taken into custody Tuesday. He faces a slew of traffic violation charges, along with three counts of felony theft by shoplifting, fleeing or attempting to elude a police officer, criminal trespass and for possessing drug-related objects.

No one was injured during the chase, which began when an officer tried to stop Thompson around 3:40 a.m. for speeding – going 51 mph in a 35 mph zone. The officer also noticed that the car had no license plate.

Shoplifting leads to drug discovery

COOKEVILLE — A reported shoplifting led to more trouble for one Cookeville woman.

According to a police report filed by Cookeville Police Officer Kenneth Frye, it began with a reported shoplifting around 3 p.m. Friday at Kohl’s department store on Jackson. A female was reported to have left the location without paying for some items.

Dispatch gave him a description of the vehicle and the tag, which he located traveling south on South Willow Avenue. He stopped the vehicle in the area of 851 S. Willow Ave. and came into contact with the driver, identified as Fawn Price of Top Road, Cookeville.

“During a consent search of her person, I located a black “straw” with white residue,” Frye’s report states. “Price told me that she used it to ‘snort’ Hydrocodone.”

Addicts target Wal-Mart in shoplifting scheme

INDIANAPOLIS – Feeding a heroin addiction often means addicts resort to stealing – from friends, family and businesses.

For former heroin addict Ashley Milburn, it meant a shoplifting scheme involving a group of women earning hundreds of dollars a day illicitly by scamming Wal-Mart.

Milburn, now serving time behind bars, spoke to Call 6 Investigator Rafael Sanchez about how she used to steal from the big box retailer – and how she’s sure her fellow heroin users are still going about it.

The key to the scam: Wal-Mart’s no-receipt policy for returns.

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High Profile Cases

November 6, 2014 by Leave a Comment

shoplifting7A high profile, professional athlete was arrested recently for shoplifting. Allegedly, he paid for a bottle of cologne and then proceeded to the menswear department. He placed a few packages of underwear in his shopping bag. At the point of his apprehension, he was also found to have a “tester” bottle of cologne in his bag (unpaid for) as well. He is not the first athlete/ celebrity to be caught shoplifting, and most certainly will not be the last.

A similar situation would include a shoplifter who is related to (or claims to be related to) a high profile personality. It is a frequently used tactic that a shoplifter will try to intimidate their accusers by name-dropping congressmen, chief or police, celebrity, etc. More often than not, these claims are unfounded, or play no significant role in an investigation. For the few times that the claims are true, your store will have more to contend with than the loss of merchandise.

These high profile shoplifters do not steal out of need. They clearly have the money to pay for such items. They are stealing out of boredom, entitlement, or simply because they are looking for a challenge- to see if they can get away with it. Their crimes are not necessarily expensive items; sometimes it can be simple items like underwear, health and beauty items, even food items. This means that it is not improbable that a celebrity can shoplift from a small, local store.

That being said, it is not a common occurrence for a store to experience a shoplifting incident by a high profile person. It is merely a fact to keep in mind while you are making shoplifting apprehensions. You never know whom you might be picking up, so it is best to make sure your policies, practices and actions are completely by the book for each incident.

After making an apprehension, the suspect might try to bully their way out of the situation by telling you who they are, or who their relations are. This is the time to be professional, avoid making sarcastic or snarky comments and stick to the facts. If they truly are a high profile personality, every little step may be dissected and criticized later on. The media outlets will inevitably catch wind of the apprehension and will try to make it a bigger story that what it needs to be.

You can be faced with news reporters, bloggers, fans, etc coming into your store. Some will just look around to see the now infamous store. Others will come in and try to make trouble- asking questions, making comments, even potentially making threats.

I worked loss prevention for a retailer, who many years ago made an apprehension of a very famous actress. Even though the case was air tight, national news sources hovered throughout the entire process. Statements had to be made to ensure the integrity of our company’s reputation remained in tact. At the same time, it was very important that our own legal team was involved to make sure we did not overstep the legal boundaries of an open court case. If for some reason the apprehending officer made statements to the media, and the case was lost in court, we could have had potentially disastrous civil liability cases brought against us by the actress. On the day the verdict from her criminal trial was to be released, every one of our stores across the country received numerous threatening phone calls. Some merely threatened to never shop with us again if “we” found the actress guilty of shoplifting. Others had more severe threats of violence.

With the increased chance of media scrutiny during a high profile shoplifting incident, retailers can often find themselves faced with more variables and consequences than what was anticipated for a seemingly routine shoplifting apprehension. Without black and white policies in place, the added liability from a case gone wrong can have devastating and lasting consequences both to a retailer’s image, and their financial bottom line.

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Retail Shoplifting Rings

October 28, 2014 by Leave a Comment

theft (12)Shoplifting according to research can begin early in your teens and become a dangerous criminal habit into your adult life. Shoplifting rings across the nation are becoming a way of life for the people involved without thinking anything serious can happened to them. Many of these people began when teenagers, and as more people become involved, the amount they can and will steal from a store can be in the thousands of dollars. For more information about this and other stories follow the links below.

Kelly’s Stupid Criminals of the week!

Featuring this week a “British fraudster who pretended to be quadriplegic and sometimes comatose for two years to avoid prosecution has been convicted after police caught him on camera driving and strolling around supermarkets.”

CLICK HERE

And a 30 year old woman was arrested Sunday morning after police say she spent a few hours stuck in a chimney of a home of a man who had recently ended a relationship with her. Not the best way to win back his heart..

8 accused in Polk retail theft ring

POLK COUNTY, FL (WFLA) –

Polk County Sheriff’s detectives say eight people suspected of participating in a retail theft ring are accused of stealing $6,500 worth of merchandise from local stores.

The suspects are 17 to 26 years old. Most were arrested last week.

Detectives say the suspects worked together as a group and stole items from several retail locations including Bealls Outlet, Sports Authority, Hot Topic, Footlocker, Rainbow, Crush, Dillard’s, Kohl’s, Toys R Us, Cotton On, and the Burlington Coat Factory.

The group primarily stole clothing by concealing the merchandise and walking out of the stores without paying for the items, according to investigators. Approximately $6,500 in stolen property has been identified, but suspects are believed to have been responsible for stealing merchandise worth thousands’ more.

“Retail theft is a serious problem in Florida. It drives up the cost of goods and we all suffer through higher prices. We often find that these thieves are stealing every day. I applaud the hard work of our detectives—we will work hard to make sure these suspects are held accountable,” said Polk County Sheriff Grady Judd.

Seeking Safety: A blueprint for reducing youth crime that works

Almost every time a teenager was gunned down in Minneapolis, Mayor R.T. Rybak took to the street corners to console family and friends of the victim and to search for answers.

More often than not, Rybak said, people in those neighborhoods told him they could see it coming. The victims almost always led lives marked by violence. Most were young gangbangers with guns and little hope, teens who seemed predestined to die in a city that Time magazine dubbed Murderopolis in 1996.

With every killing, Rybak wondered the same thing about the people who knew the victim was on the wrong path: “Why the hell didn’t they do anything?”

That thought remained with Rybak when Minneapolis – like so many other cities across America – had a defining moment that brought the city to action.

Woman accused of shoplifting over $500 in clothing arrested

$660 worth of clothing was recovered by a loss prevention worker at the JC Penny store located in Stones River Mall on Sunday. According to a Police Incident Report, a shoplifting suspect by the name of Maria Fernandez entered the store and stuffed over $600 worth of clothing into her purse. The woman then passed every point of purchase.

The 54-year old woman is being charged with theft over $500.

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Who Are You Really Hiring?

October 2, 2014 by Leave a Comment

theft (13)So you run an ad to fill a position you have available. You receive some really good resumes and you move to step two, screening them. With the intense competition for employment, how do you know if what you have before you is real or maybe…a bit over inflated? There are a couple of things that you can look at to help you to spot potential problems.

I view resumes and applications as a “test” to see if the candidate can spell, write properly and comprehend the questions and information requested. After all this person wants the job, you have the job, you would think they would want to put their best foot forward in their first impression. Integrity is one of those.

In the years that I have been a hiring manager I have found a few items to look at that help me sort good from bad.

Dates of Employment: I have found this to be one of the most lied about items on a resume or application. Let’s say the candidate has had three jobs. They were fired from job number two and do not want you to know about it. Instead of listing job number two, they simply stretch the dates of jobs one and three to cover. So, verify the dates of employment.

Over- Inflated Titles: Many times when you look at the resume you will find that a title does not fit the experience or even the age of the candidate. The resume shows a string of titles like this: Dock Worker then Dock Lead then Dock Supervisor then Dock Manager then Director, Central Intelligence Agency, then Dock Manager, Central Intelligence Agency. The candidate is 24 years old. Okay, maybe this was a bit of a silly example but you get the idea. Pay attention to titles and age.

Resumes That Are Too “Slick”: Most of us are not the greatest writers. Look at me. But we can get across our experience in basic form. Someone whose resume reads like an advertisement for a new car company probably had some serious help which could mean a professional resume writer put it together. This may be all right for some companies. But you have to ask yourself is this the person I am really hiring. It could also mean that the professional writer, in some cases to make their customer happy, over inflated the candidate’s experience. Does the resume seem too good to be true? Then it probably is.

All Candidate’s Should Fill Out An Application: This is in addition to their resume. Compare the two. You will be surprised in some case when you actually compare the two. They may not remember the lies they told on the resume. Always require both and compare them.

If they lied at this point in the application process what do you think they will do when they work for you?

Bill Bregar is the CEO of Loss Prevention Systems. He can be reached at 770-426-7593 x101 or at www.LossPreventionSystems.com

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Training Your Witness

October 2, 2014 by Leave a Comment

shoplifting7When apprehending a shoplifter, you need to make sure that all employees are aware of what their roles are and what they are responsible for doing. You should use job positions as a basis for who is responsible for what. For example, you might determine that only managers are allowed to make shoplifting apprehensions. You might qualify any employee who has gone through loss prevention training can make shoplifting apprehensions. Determine your skill level and staffing requirements to determine what makes the most sense for your stores.

The next step is training employees to be a witness during a shoplifting apprehension. Most loss prevention training revolves around identifying and detaining a shoplifter. Having a witness and defining what that witness can and cannot do is often overlooked. Unfortunately, it is very easy for a witness, who is not properly trained, to do more damage during the actual apprehension than they provide a benefit.

Even when an employee is only a witness, they are still acting in an official capacity as a representative of your company. If these employees were to make comments of take actions that are illegal or improper, the company can still be held liable for those actions. As a result, any employee who will potentially be called upon to act as a witness should be thoroughly trained prior to their involvement in any shoplifting detentions.

A witness is anyone who will assist a trained employee that making a shoplifting apprehension. The witness really needs to be another store employee. Using a customer as a witness is not advisable. Customers might take it upon themselves to exert undue force, or to make derogatory comments. A customer, no matter how well meaning their intentions may be, does not understand what their legal limitations are during the situation, and the store will still be held liable for any of their actions.

A witness should have a basic understanding of what a shoplifting apprehension is, and why it is happening. They do not need to be intimately aware of the actual sequence of events. They do need to understand they are there to provide an eyewitness to the detention and any questioning that may follow.

The witness should also provide a balance for the shoplifter. If a female is being apprehended, there needs to be a female employee involved in the apprehension. This can either be the employee who is detaining the suspect, or the witness. Same rules apply if the suspect is a male. To avoid a possible (warranted or not) sexual assault or harassment suit there always needs to be an employee present that is of the same gender as the shoplifting suspect.

Ideally, the same witnesses needs to be present from the time of detention to the time the shoplifter is either released on their own, or into the custody of law enforcement. Since the witness might be required to give a statement to the events, it is easier if only one person is there from start to finish. Having a replacement during the middle might provide unnecessary confusion as to who saw which part of the apprehension, and did some pertinent information get missed during the switch from one witness to the other.

Once the employees have made their initial approach for the detention, and have brought the shoplifter back to the office or room to do the interview, the witness needs to be in charge of documenting the incident. They should start by documenting what time the approach was made, what time the suspect entered the office and what has been said up to this point. Specifically, the suspect’s comments upon the initial approach should be quoted accurately. Did they deny it? Did they admit to stealing? What happened next? Was there a chase or a physical altercation? Did the suspect come back peacefully?

Any statements made or given need to be notated. The final disposition of the suspect and the evidence needs to be made. If law enforcement was called the time the call was placed, and the time they arrived should be documented. Above all else, the witness needs to realize they are there to assist and not to interfere with the investigation and apprehension of the shoplifting suspect.

 

 

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Managing and Reducing Shrinkage

October 1, 2014 by Leave a Comment

theft (11)The retail industry according to some reports was a $2.5 trillion in 2012 with a predicted increase of 3.4% for the year 2013. As the busiest season for the retail industry is fast approaching, retail stores and businesses will be busy keeping inventory on the shelves as avid customers shop at their stores. While many retail stores prepare for this time, retail security and surveillance should be part of their strategy to keep this year the best profitable yet.

For more information about shrinkage follow the links below.

Reducing Retail Shrinkage: How to Beef Up Security and Prevent Loss in Your Store

Shrinkage (aka: Public Enemy #1 for most retailers), can eat up a significant amount of your profits. According to the National Retail Federation, retail shrinkage amounted to $34.5 billion in 2011, and a big chunk of that was due to theft or fraud.

That’s why it’s critical to constantly stay on top of protecting your store. Keep your systems up-to-date, be vigilant about spotting fishy behavior, and see to it that your staff is adequately trained to deal with security issues.

To help you do all that, below are some of the most common causes of retail shrinkage along with security tips to help you prevent them.

Shoplifting

A common problem among retailers, you can prevent shoplifting with the following steps:

1. Recognize the signs – Educate yourself and your staff on how to spot shoplifters. Keep an eye out for people who:

Survey: Retail shrink translates into $57 billion loss; cash theft jumps 20%

New York — Shrinkage levels average 1.27% of sales, which translates to a $57 billion loss to the industry, according to the U.S. Retail Fraud Survey, which is based on research into the systems and strategies used by 100 leading North American retailers.

The biggest area of store loss remains employee theft (38% of shrink), up 3% from last year, according to the study, published by U.K. based Retail Knowledge and sponsored by Volumatic and Kount. It is followed by cash theft (24%), up 20% from last year, administration and book keeping errors (21%), down 9%, and shoplifting (11%), down 15%.

The biggest area of online loss is fraudulent use of credit cards (59% of shrink).

In other survey highlights:

• Return fraud is costing retailers an average of 0.25% of sales this year, compared with an average of 0.4% last year.

• With regards to loss prevention departments, on average, each member of the fraud prevention team is responsible for $103 million of sales.

Managing Loss Prevention

5 Tips for Reducing Shrink

1. Find vulnerabilities: Take a look at your store layout as though it were in a heist film and think, “If I were to steal something, how would I do it?”
2. Determine where to concentrate your resources: Your high value items that can be stolen easily should be of more concern for you when merchandising, as well as protecting with security features.
3. Cameras don’t work unless you use them: Installing cameras isn’t enough to deter employees and serial shoplifters. If you notice discrepancies in the register or on the shelves, look at the tape.
4. Signs deter some, not others: Professional thieves aren’t likely to care much about signs (or cameras for that matter). However, employees and amateur shoplifters can be dissuaded if they know they are being watched.
5. Talk to your team: Employees need to be on the same page as their manager when it comes to a loss prevention strategy. Source: retailminded.com

 

 

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Racial Profiling In the Retail Industry

September 24, 2014 by Leave a Comment

shoplifting4According to The National Association for Shoplifting Prevention “There is no profile of a typical shoplifter. Men and women shoplift about equally as often.” And race does not matter. Men, women, teenagers and children shoplift regardless of their race or economic status. Yet, entering a store race does matter, and profiling takes place immediately. Allegations about racial profiling involving Macy’s is one of the most recent news in this country, but it won’t be the last.

To read more about racial profiling in the retail industry follow the links below for more information.

“There are very few African-American men in this country who haven’t had the experience of being followed when they were shopping in a department store. That includes me.”

                                                                                President Barack Obama

Racial Profiling
How does it make you feel when you hear the President of the United States making these remarks? Is it an accurate statement? Is it a fair statement? Is it a reflection of one man’s opinion, or an indictment of the loss prevention industry as a whole? Regardless of your personal politics, a statement made with such conviction from the leader of our country sends a powerful message—and one that deserves our collective attention.

But when the comments were made by the President and repeated over and over by the press following the Trayvon Martin verdict, the implications were accepted by the general public with very little push-back. Why is that? If it’s a valid assessment, why hasn’t it been addressed more aggressively? If it’s not a valid assessment, why haven’t we been more forward or vocal in our objections? More likely, the general response—or lack thereof—is largely a product of many factors that can complicate the subject and lead us down difficult roads. Have we done enough? Do we need to do more? It is a highly sensitive topic, but it’s one that’s not going to go away or can be buried in the sand.

Macy’s reaches agreement over racial profiling allegations

Macy’s, Inc. today issued the following statement: “Macy’s has reached resolution with the New York State Office of the Attorney General related to allegations of racial profiling in our stores in New York. We also have settled in principle various lawsuits related to these allegations.

“To be clear, our company’s policies strictly prohibit any form of discrimination or racial profiling and any occurrence of such behavior will not be tolerated in our organization.

“Moving forward, our company will be initiating a series of measures including enhanced training and education for our loss prevention and sales associates. We also will be adopting an expanded role for our security monitor to help ensure that we have the right policies and procedures in place, and that we are constantly reviewing our compliance with them.

“We at Macy’s are committed to fulfilling to the ideals of diversity, inclusion and respect that our company aspires to achieve – every day, in every store and office, with every customer and associate.

Racial Profiling

Does Profiling Exist?

The media often asks me if retail store security personnel use “profiling” tactics as a means of determining which customers are most likely to steal. The answer is undeniably, yes.

Profiling is a Tool

The concept of shoplifter profiling is a proven loss prevention tool and is currently being practiced in most major retail stores by trained loss prevention or security staff. Does that seem shocking? It shouldn’t, as long as it doesn’t include the discriminatory practice of focusing on the race of the customer alone. Profiling is used everyday as a method for quickly focusing in on a person, a product line or a section of a store most likely to contribute to shoplifting. All investigative agencies including the police, FBI, and others have used profiling as a tool to narrow the field of possible suspects. Why shouldn’t retail store security be able to do the same? Store and customer profiles are developed during day-to-day operation and by collecting and analyzing inventory data. This data provides both a quantitative and a qualitative basis for determining where, when, how, and by whom shoplifting is likely to occur in the future.

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Shoplifting News

September 18, 2014 by Leave a Comment

shoplifting2The people and the methods shoplifters use nowadays should not come as a surprise for any of us. From the elderly to the handicapped shoplifting is a crime that seems to have no age nor race attached to it. For a retail store, prevention seems the solution that makes sense, and can keep the store from losing its profits.

To read more about this follow the links below.

Shoplifting Suspect Shirley Mason Used Wheelchair Cart For Getaway: Cops

FRUITPORT TOWNSHIP, Mich. (AP) — Police in Michigan say they arrested a shoplifting suspect following her slow-speed getaway in a $1,200 motorized wheelchair shopping cart taken from a Wal-Mart.

The Muskegon Chronicle (http://bit.ly/1wgjeQT ) says police located 46-year-old Shirley Mason about 2 miles away, riding the cart with $600 in clothing.

A customer called police Monday night to report someone riding a shopping cart from the lot at the store in Muskegon County’s Fruitport Township.

Police say Mason told them she couldn’t find anyone to pick her up from the store and took the wheelchair cart “because she didn’t feel like walking.”

Authorities say Mason told officers she planned to sell the clothing.

Mason is charged with organized retail crime and has a probable cause hearing Sept. 23.

Mason doesn’t have a listed phone number.

Police: Mom and DAughter caught shoplifting

HOOSICK — State Police say a mother and her 23-year-old daughter were caught shoplifting from a supermarket. Vicki Meyers, 43, and her daughter Toni were allegedly seen by employees taking items at a TOPS supermarket and hiding them in their purses. According to authorities, they left the store with more than $70.00 worth of merchandise. The pair have both been charged with petit larceny.

Teacher accused of shoplifting using child

Wesley Chapel, Florida — A Pasco County teacher has resigned from her position, accused of shoplifting and using her young daughter to hide the stolen electronics.

Friday, parents are in shock that a trusted middle school science teacher sits behind bars.

Investigators say Amanda Hammon took her three-year-old on the shoplifting spree and had the child carry her backpack stuffed with the stolen goods from a Walmart in Wesley Chapel.

Hammon was a teacher at John Long Middle School in Wesley Chapel, and now, she’s a Pasco inmate without a job.

Investigators say this wasn’t just a one-time crime. In the past week, the middle school science teacher is accused of stealing electronics from Walmart four times with her daughter in tow.

Arrest records show Hammon confessed she’s been shoplifting to support her drug habit.

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Shrinking Margins? Internal Controls Can Help

September 18, 2014 by Leave a Comment

shoplifting4Occupational fraud is a problem for most businesses, both large and small. Fraud is committed when an employee, through a deliberate and usually illegal process, misuses or misappropriates the resources or assets of a business for their own benefit. It’s willful and deliberate worker misconduct, which causes the business to suffer financially due to theft of time, services, inventory or money.

This type of fraud is such a widespread and injurious problem that approximately 1/3 of small businesses close due to it, mostly because it goes undetected. This is a regrettable situation, because it’s largely preventable if properly monitored internal controls are in place. It’s usually uncovered only by accident or through a whistleblower.

Actively managed internal controls can prevent or detect most types of misappropriation of assets and fraudulent financial reporting. They’re processes created to track and achieve goals in specific categories (i.e. operations, time keeping, inventory, financial reporting and compliance with applicable laws and regulations). While most of these processes are universal, specific ones may need to be added to address unusual situations or particular fraud concerns.

These controls should include operations and finances. They’re designed to create a system which protects assets through prevention and timely detection of unauthorized or illegal employee behavior. Some of these processes include: monitoring the flow of paperwork; reading, understanding and acting on financial reports; noticing and acting on the behaviors and attitudes of employees; listening to and acting on employee tips and hints about problems.

To start creating internal control measures a business can review past and current procedures, events and concerns – the company’s strengths and weaknesses, investigate and evaluate employee complaints, acknowledge and list all of the problems/symptoms, etc. This is done in a methodical timely way. It’s important to note that the controls are fluid and will need to be reviewed and changed over time.

Well managed, easy to use and structured internal controls are considered to be one of the most effective deterrents to occupational fraud. However, these controls are only paper work if management doesn’t take action. No program, by itself, will keep employees from stealing. Supervisors must be responsible and take action if it’s to be effective.

Opportunity (lack of controls) and ineffective or no consequences are 2 of the main reasons employees commit fraud. It’s unreasonable and naïve for mangers to expect their workers to be atypical. Yet they do, only to be taken advantage of. Unfortunately, many have learned this lesson the hard way.

Nicole Abbott – writer, educator and psycho-therapist

 

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