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How Can You Prevent Fraud?

Compliance Knowledge Base | Fraud Awareness

Posted by: Morgan Rennie Published: Tue, 11 Sep 2018 Last Reviewed: Tue, 11 Sep 2018
How Can You Prevent Fraud?

For an individual at home and a business with employees it is important to prevent fraud from occurring. To prevent fraud, it is necessary to commit to a preventive procedure, which will include being aware of the different forms of fraud which can take place, and then subsequently implementing all of the necessary safeguards which can protect an individual and a business against fraud. To allow this, individuals and organisations need to conduct a form of fraud prevention training and have knowledge of fraud and its implications.

How can an individual at home prevent fraud from occurring?

For an individual at home, it is a case of being vigilant and having knowledge of what fraud specifically is. Therefore, there is plenty of advice and training courses that offer individuals exactly this.

Individuals need to be aware of organisations they deal with on a daily basis; for example, you need to be aware of all of the rules which your bank is subject to. For example, if a bank calls you asking for your bank details because they need to access some of your accounts for routine checks, this should immediately raise alarm bells. This is because you should be aware that your bank would not call you asking for your details (they may ask for your details over the phone, but this will only ever occur if you ring them directly). Therefore, you need to be aware of what your bank's conduct is.

As an individual purchasing goods online, you also need to be aware of what is involved within the payment process. A genuine online company which requires you to pay for a product or a service online would not use payment methods such as MoneyGram, MoneyPak, Reloadit or Google Play. This is because, if fraudulent activity occurs through these services, as an individual it is difficult to get your money back. Thus, you need to question the payment process used by certain companies and decide whether it is something which you know is trustworthy.

Essentially, if you are ever concerned that something appears to be "a bit dodgy" or too good to be true, such as an online free trial, then simply ask someone. Action Fraud, the UK's national fraud and cybercrime reporting centre, has a phone number available online for you to call from 8am to 8pm if you need advice.

How Can You Prevent Fraud?

How can a business prevent fraud from occurring?

It is essential for a business to prevent fraud from occurring, because if it does occur they will suffer financial repercussions as well as reputational damage. Therefore, the majority of businesses commit to a fraud prevention programme. This can include effectively training employees and managers to identify the reasons that fraud might potentially occur and subsequently solving these problems.

The Fraud Triangle Theory can be effectively used by organisations to understand why their employees might engage in fraudulent activity. This theory states that if pressure, opportunity and the ability to rationalise fraudulent activity are all present, then an employee will commit fraud. For example, an employee might experience pressure at home to pay certain bills and yet feel that their company is not paying them what they are worth. If the company is not actively committed to preventing fraud opportunities this might arise across the company, and then the employee may rationalise that their fraudulent activity is completely justified.

As a business you have the responsibility to check upon employees and understand whether they are experiencing pressure which might drive them to commit fraud. Subsequently, the business needs to commit to fraud prevention to minimise the opportunities available for an employee to commit fraud. If a business commits to these steps, then the employee will not be able to rationalise their fraudulent activity.

There is plenty of advice and training courses circulating today with the purpose of helping individuals and organisations to prevent fraud. It is essential to commit to fraud prevention training in order to protect yourself against fraud.

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