There’s much more fraud than you think
More and more companies are confronted with fraud. Fortunately, not all attempts at fraud result in a loss, as businesses recognise them and are able to avert disaster. However, it is becoming increasingly difficult to prevent, as the number of fraud attempts is rising and fraudsters are becoming increasingly resourceful. And when they do succeed, the losses are often severe. Sometimes amounting to millions of euro!
So it is better to make sure you're well covered.
To avoid losses due to fraud, you must take active steps to prevent it (see the tips and tricks below). But even if you make every effort to prevent fraud, you can never rule out the possibility of falling victim. Because fraudsters are becoming more and more inventive. This is why you should take out fraud insurance as the final step in your prevention strategy. So that your loss is compensated if a fraudster still manages to deceive you, your employees or your colleagues.
What does fraud insurance cover?
With a fraud insurance policy, you protect your company against financial losses caused by internal and external fraud. You will probably have to incur costs to limit further losses, such as the costs of legal proceedings. These expenses are also covered by fraud insurance.
Internal fraud
Internal fraud is fraud committed by one or several of your employees or colleagues. It is the most common type, although most people assume the opposite. After all, internal fraud is often covered up, because the damage to trust is great (you can trust your own employees, can't you?)
Examples include:
- Transferring money from the company to a private account
- Generating false invoices on non-existent suppliers and diverting the company's payments to a private account
- Purchasing goods in the company's name for private purposes
- Submitting incorrect expense or time claims
- Selling company secrets to a competitor
External fraud
External fraud is committed by people outside your business. They may fraudulently impersonate a manager or a business associate (customer or supplier) of your company to steal money or goods.
Examples include:
- CEO fraud: someone poses as the manager of the company and orders an employee to transfer a sum of money to his account
- Invoice fraud: a fraudster intercepts an invoice and replaces the beneficiary supplier's account number with his own.
Buyer fraud: someone pretends to be a large existing customer or a promising new customer and has goods delivered to their own address
How can you prevent fraud?Tips & tricks
The four-eyes principle
Transferring large sums of money or delivering large quantities of goods? An employee can never do that alone. The consent of a second colleague is always necessary.
Control processes
A business associate gives you a new account number? Or new contact details? Always make a call to someone you trust in that business to check!
Tests
Keep your employees and colleagues alert to fraud risks. For example, send them fake phishing mails and monitor how they react.
Solid IT infrastructure
Install a firewall and always keep your software applications up-to-date. Make sure that backups are kept completely apart from what they are duplicating, in other words, that they are on separate servers.
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