| Detecting
and Preventing Fraud
Falling victim to counterfeiting, check or credit
card fraud can devastate a small business.
Since counterfeiting is mushrooming and the policy of extending credit
continues to become more common, entrepreneurs must focus their resources on prevention.
Research has shown that amateurs commit more than 65 percent of all fraud, demonstrating
that a significant amount of fraud is relatively easy to detect.
The first step in preventing fraud is to educate employees who are
responsible for accepting currency, checks or credit cards. Because “front line”
employees are the decision makers when it comes to accepting payments, they must be
trained to recognize questionable documents. If provided with appropriate recourses and
adequate instructions, they can be a business owner’s most valuable ally in limiting
fraud related losses.
A final word of advise: the more time and effort small business owners
invest in detecting and preventing fraud, the less time and effort they will spend dealing
with it once it hits.
| Counterfeit Currency: Don’t Get
Stuck with the Bill |
Pay Attention to Those Checks |
| Small businesses are at tremendous risk of receiving
counterfeit currency. Counterfeiters know that employees of small companies tend to
receive less training in detecting bogus currency than those of major corporations. This
lack of training, combined with the increasing sophistication of modern photographic and
printing equipment that can easily produce large quantities of seemingly authentic
currency, mean that business owners have genuine cause for alarm. The number one rule
is to examine the bills you are receiving. Many counterfeiters rely less on their own
counterfeiting skills than on the inattention of employees. While this careful scrutiny
takes only one or two more seconds, the extra time spent will result in catching most
counterfeit bills.
|
Consumers currently use personal checks to pay for
approximately 60 percent of their purchases. Affordable computer technology is almost
single-handedly responsible for the rise in check forgery. All businesses should be
careful when accepting checks. Call our office for a copy of our “Check Acceptance
Guidelines” free to all clients.
| Credit Card Fraud Industry Keeps
Growing |
| Between 50 and 60 percent of fraud occurs with lost or
stolen credit cards, while nearly 20 percent takes place with cards stolen straight from
the mail. Two common examples of credit card fraud are counterfeiting cards and
re-embossing or re-coding lost, stolen or never received cards. It is of vital importance
that all employees follow and adhere to your company’s credit card guide. |
|
| Front Line Fraud Prevention Tips |
| Motivating
and training staff to ferret out fraudulent behavior is crucial. The key is to reward them
for doing you an invaluable service by making you less susceptible to fraud. Here are 8
suggestions to help “front line” employees to detect fraudulent bills, checks
and credit cards.
1. When suspicious of any bill,
compare it to a real one.
2. When accepting a check, always
adhere to your company’s check acceptance procedures.
3. Check the signature panel of the
credit card. An altered signature panel may appear discolored, glued or painted.
4. Always verify that the signature
on the credit card matches the signature on the sales draft.
5. Check validation dates. If you
accept any card outside of its validation date, that business will pay the bill.
6. Credit cards are made with white
plastic. If the sides are not white, it is almost sure to be counterfeit.
7. Watch for suspicious behavior.
For example, is the customer exhibiting any signs of nervousness?
8. Make sure the account
number printed matches the embossed number on the card. This will ensure that you are not
accepting a re-coded card. |
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