Fraud is a growing concern for businesses of all sizes. According to PWC’s Global Economic Crime and Fraud Survey, 49% of businesses worldwide were victims of fraud in 2018. This survey explains why more companies are increasing their spending on fraud mitigation. They’re investing in technologies to defend themselves against fraud.
This article will highlight some of the common types of fraud, their examples, and how they happen. It will also discuss some fraud mitigation measures and recommend the best solution to help you prevent fraud altogether.
Business identity theft involves fraudsters stealing a company’s identity and using it to buy solutions by establishing lines of credit with retailers or a bank. Criminals target businesses because it gives them access to bigger account balances or higher credit limits. It’s also unlikely for large transactions to spark any suspicion. Criminals target bank statements, financial statements, or federal tax identification numbers – most of which they can get from your computer.
According to the ACFE, payroll schemes are twice as common in small businesses compared to large ones. They are also one of the most common types of corporate fraud and are often committed by employees trying to get money they aren’t entitled to from their workplace.
Examples include ghost employee fraud, timesheet fraud, fraudulent claims over some units produced, and false expenses fraud. Others are sick leave fraud, misclassifying employees, commission and bonus fraud, and pay rate falsification.
As the name suggests, this type involves returning products that shouldn’t be returned, thereby stealing from a business. Although some cases end up being an honest mistake on the customer’s side, return cases are on the rise.
Return fraud can lead to poor customer experience, increase operational costs, and cause you to lose profits. Some common examples of this include receipt fraud, price tag, switching, returning shoplifted items, wardrobing, and shoplifting.
Financial fraud can include:
Investing in fraud detection software is the best thing that businesses can do. This software screens transactions in real-time, cutting out the need for employees to review the order themselves. They also offer deep insight into user behavior and spot the implicit relationship between the behavior and the possibility of abuse and fraud.
Additionally, the software offers real-time operation tracking and reporting. You can track your key performance indicators in real-time and monitor orders, learning about their status and information like location, payment method, and channel. Contact us today to learn more about fraud detection software.