by Lesley Mason

Created on: November 07, 2010   Last Updated: November 08, 2010

There are two main angles when it comes to protecting your business from fraud.  The first covers fraud perpetrated against the business by complete outsiders; the second is fraud committed by employees within the organisation.

PROTECTION AGAINST EXTERNAL FRAUD

Protecting against fraud perpetrated beyond your walls is no different for a business than it is for the individual. 

The commonest form of external fraud is a variation on a theme of identity theft.   There is no 'rocket science' when it comes to protection against it – merely the usual raft of common-sense measures:

Ensure your IT protection is up to date – firewalls, spam filters, and virus protection are essential.  Beware what data you share:  you cannot do business without sharing certain levels of confidential information, but make sure you have very clear protocols as to exactly what information can be given out, who by and who to.  Particularly sensitive data should be restricted and its disclosure checked. The companies you deal with should regularly check your authorised signatories – but don't wait for them to do so.  Make it an annual routine to confirm current authorisations, especially for high-value orders or legal/consultancy appointments. When staff leave – make sure that all of their remote access passwords are deleted – not just to your systems but to any other websites they had access to in the company name.  Have clear processes for ensuring suppliers know they are no longer authorised to order on your behalf. Rebranding and got a load of old-style stationery to despatch?  Don't dump it.  Anyone can use it and recipients acting in good faith will have a claim.  Either completely shred it or find a mechanism for proper use internally (eg making note-pads out of out-branded headed paper).

The second external threat is "customer fraud".  Again – do the simple checks.

Don't set up credit accounts without at least two solid credit references. Check identities and addresses.

…and talk to your insurers to see what cover they can offer in the event you get it wrong. 

Finally, the third external threat is "supplier fraud".  Not everyone who wants your business is everything they may seem.  Even the most rigorous procedures in the world may not uncover blatant lies, but rigour is still your best protection:

Have a robust process for choosing suppliers that includes multiple

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