The risk of occupational fraud is real
Just because you're a small business doesn't mean you're immune to fraud
- A brand new front desk clerk for an insurance agency, who has just defaulted on her student loans, receives, records, but then simply pockets more than $2,000 in cash premium payments.
- A secretary at a medical office, going through a bitter divorce, alters computer records and pockets $1,200 worth of patients’ cash co-payments that were stored in a desk drawer.
- An artisanal supplier to a small gift shop double bills, using the shop’s own credit card, to pick up the cost of their buying new equipment they couldn’t really afford.
- A clerk responsible for equipment for a private school, orders $367,000 worth of unneeded cameras over a four year period and then sells them herself online. Her husband had lost his medical license and they couldn’t pay their mortgage.
- An accounts assistant with a gambling problem creates a fake vendor account, bills the nonprofit agency where she works, and collects more than $200,000 over four years.
- A potentially major account for a small cider producer keeps making partial, late payments as it goes through a Chapter 7 reorganization.
- An assistant manager holding down two jobs and trying to go to school at the same time closes up a retail store overnight, but then returns, tampers with the security system, and steals $39,000 in cash from the store’s vault.
- A payroll clerk at a home health care service has to take in her two grandchildren. She pads her own hours and embezzles more than $30,000 in unearned income over a ten year period.
Small businesses need to learn if their employees and suppliers are under pressure, and to minimize their opportunities to commit fraud.
The OpenSource Agency, staffed by professional investigators experienced in conducting background checks on individuals and businesses, specializes in discovering if employees, vendors, or suppliers are potential fraud risks, and in auditing operations to determine if the proper protocols are in place to prevent fraud.
Links to OSA's guidance on avoiding small business fraud
- The forgotten risk
- Preventing fraud
- There's no replacement for human intelligence
- OpenSource background checks
- Anonymous anti-fraud hotlines
- Avoiding credit card fraud
- Common small business scams
- Common types of cash fraud
- Conduct a fraud risk analysis
- Draft an anti-fraud policy
- Preventing shoplifting
- Real and fraudulent workers' comp claims
- Signs of financial pressure
- The profile of a small business fraudster
Links to sources of information on small business fraud
- Report to the Nations on Occupational Fraud and Abuse: 2016
- Fraud prevention check-up
- Fraud resources library
- This crime in the workplace is costing businesses $50 billion a year
- Small businesses suffer from company fraud
- Identifying small business fraud
- Internal controls for small business
- 10 signs of problem gambling
- Alcohol addiction
- Gambling addiction