Fraud Briefs Archives - Page 12 of 24

14 Jul 2021

Preventing Ransomware Attacks on Manufacturers

The world’s largest meat production company was recently sidelined by a ransomware attack. The hack forced the company to temporarily shutter plants in the United States, Canada and Australia, affecting the U.S. meat supply and even hurting commodity prices. If it seems like cybercriminals often target manufacturing (including food processing) and distribution companies, that’s because they do. According to software company Varonis, manufacturers account for nearly a quarter of all ransomware attacks — more than any other industry. To prevent your company from becoming another statistic, learn about security breaches and protect your network. A high price It’s only natural that manufacturers fear data breaches — and unfortunately hackers often can use that fear to cripple organizations through ransomware. This type of malware is installed on a computer...

14 Jul 2021

Fraudsters Prefer Cash Because It’s Virtually Untraceable

Roger Rossmeisl, CPA

Fraud Briefs

Fraud perpetrators take whatever they can get their hands on. But fraudsters prefer cash because it’s virtually untraceable. Fortunately, fraud experts have the expertise and tools to trace even cash-based theft. Multiple opportunities According to the Association of Certified Fraud Examiners, there are three main categories of cash fraud, which includes checks because they’re easily converted to cash: theft of cash on hand, theft of cash receipts, and fraudulent disbursements. Fraudulent disbursements comprise many of the most frequently executed schemes, such as over-billing and “ghost” employee schemes. Over-billing vendors usually submit inflated invoices by overstating the price per unit or the quantity delivered. A dishonest vendor also might submit a legitimate invoice several times. Over-billing may involve collusion with employees of the victim organization, who typically receive kickbacks for...

25 Jun 2021

Keeping Your Loyalty Program Safe From Fraud

Roger Rossmeisl, CPA

Fraud Briefs

To generate revenue and foster customer loyalty, many businesses, including retailers, airlines and credit card companies, create loyalty and reward programs. Such programs can help companies attract and retain customers, but they may also be subject to fraud and abuse. ATO risk Loyalty programs are particularly vulnerable to account takeovers (ATOs). In these schemes, a criminal assumes control of a customer’s loyalty or rewards account and monetizes it. The thief redeems points for goods and services for personal use or sells them on the black market. These days, the information usually ends up on the dark web. ATOs often are successful because many loyalty programs lack the robust fraud controls and dedicated teams of investigators to prevent and investigate them. Often, companies don’t understand the extent of fraud...

22 Jun 2021

Defending your Auto Dealership from Fraud

Roger Rossmeisl, CPA

Automotive, Fraud Briefs

Defending your Auto Dealership from Fraud

Although auto sales plunged at the start of the COVID-19 pandemic, they’ve since rebounded. In fact, some dealerships are reporting record sales in 2021. Problems remain — including supply bottlenecks. Also, your dealership may be more vulnerable to fraud. Factors such as employees working from home, new vendors and even booming sales, can put your business at risk. Here’s how to prevent fraud from cutting into profits. Focus on accounting Fraud prevention starts with strong internal controls. For example, good controls generally require a dealership’s accounting department to post transactions daily, including new and used vehicle sales, repair orders, invoice payments, payroll and cash receipts. By 1 p.m. on any given day, you should have access to real-time checkbook balances and other accounting information effective as of 5 p.m. the...

15 Jun 2021

Fending Off “Friendly” Fraud

Roger Rossmeisl, CPA

Fraud Briefs

Fraudulent behavior isn’t necessarily perpetuated by people hiding their identities. For example, legitimate customers sometimes use the credit card chargeback process to their advantage — and to the disadvantage of merchants. Others routinely abuse chargebacks to steal merchandise. Here’s how to protect your business from these types of “friendly” and sometimes dishonest fraud. Chargeback mechanics Friendly fraud pivots on a customer’s failure to communicate with a merchant. Instead of contacting a seller to discuss a problem with a good or service, some customers immediately dispute a charge with their bank or credit card company. They generally provide plausible reasons for the dispute and don’t mask their identify at any phase of the process. A chargeback takes time and effort to resolve. And if the bank or credit card...

09 Jun 2021

Unreliable or Fraudulent Insurance Coverage

Roger Rossmeisl, CPA

Fraud Briefs

Unreliable or Fraudulent Insurance Coverage

Bad faith denials of claims by insurers are illegal, but some dishonest companies or agents attempt them anyway. It’s possible that just when you have the greatest need, you’ll find yourself out in the cold. Unfortunately, there aren’t a lot of great legal remedies. So it’s critical to avoid unreliable and fraudulent insurance coverage in the first place. Legal contract An insurance policy is a contract. The insured agrees to pay premiums and take reasonable steps to prevent injury or damage, and the insurer agrees to settle legitimate claims according to the policy’s terms. Not only is it good business practice for insurers to cover legitimate claims, but it’s illegal for them to deny them. There may be times when you and your insurer disagree about what’s covered...

07 Jun 2021

Assess Your Supply Chain’s Fraud Risk

Roger Rossmeisl, CPA

Fraud Briefs

The COVID-19 pandemic has put enormous pressure on global supply chains. As companies struggle to obtain the goods and materials they need, they may not pay as much attention to potential fraud signs. Unethical employees and organized crime gangs have only been too willing to take advantage of the situation. Consider conducting a targeted risk assessment that focuses on the changes that have occurred since the pandemic began. Although a targeted assessment isn’t a substitute for an all-encompassing review, it can help prevent certain threats from resulting in huge financial losses. Four items for review As part of your assessment, review: Changes in the operating landscape. As the pandemic took hold, both individual businesses and the larger marketplace changed. Some of those changes were readily apparent, such as...

02 Jun 2021

Something’s Wrong in your Office. Is it Fraud?

Roger Rossmeisl, CPA

Fraud Briefs

Somethings Wrong in your Office Is it Fraud

Not all red flags lead to active occupational fraud schemes. But when fraud is occurring, it usually leaves traces — for example, accounting anomalies — for fraud experts and other knowledgeable people to find. Owners and executives, as well as rank-and-file workers, should be familiar with the signs of fraud and know when to call in a forensic accounting specialist. Take a closer look Dishonest employees may use anything from fictitious vendors to false invoices to cover up theft. To ferret out potential fraud, always investigate duplicate payments, out-of-sequence entries, unusual inventory adjustments and accounts that don’t properly balance. Transactions for amounts that appear too large or too small, or transactions that occur too often or too rarely also merit a closer look. An increase in the number...

27 May 2021

Keep Fraud Out of Your Law Firm

Roger Rossmeisl, CPA

Fraud Briefs

As counterintuitive as it may seem, law firms aren’t immune to criminal activity. Because some firms place enormous pressure on attorneys to produce billable work, they may be particularly vulnerable to fraud. Your firm needs to know what to look for and how to protect itself from potential schemes perpetrated by partners, associates and support staff. Hold everyone to high standards A firm’s accounting department — payroll and accounts payable and receivable — is where fraud often occurs. But even trusted partners should adhere to your firm’s internal controls and fraud-prevention processes. All prospective employees, regardless of level, need to complete an employment application with written authorization permitting your firm to verify information provided. Then, call references and conduct background checks (or hire a service to do it)....

17 May 2021

Small Businesses, Big Fraud Risks

Roger Rossmeisl, CPA

Fraud Briefs

It’s not always easy being small. For one thing, small businesses (with fewer than 100 employees) experience higher occupational fraud losses: a median $150,000 vs. $140,000 for larger companies, according to the Association of Certified Fraud Examiners. That’s because they don’t always have the staffing or financial resources to implement fraud-prevention programs. Small businesses are also much more likely to fall victim to certain types of fraud — including check tampering and payroll schemes. Ask your advisor Private companies aren’t required to have annual audits, but your small business can still work with your CPA to determine where you might be at risk. He or she can train you to recognize the warning signs and help you reduce opportunities for fraud by, for example, segregating duties in...

Preventing Ransomware Attacks on Manufacturers

Fraudsters Prefer Cash Because It’s Virtually Untraceable

Keeping Your Loyalty Program Safe From Fraud

Defending your Auto Dealership from Fraud

Fending Off “Friendly” Fraud

Unreliable or Fraudulent Insurance Coverage

Assess Your Supply Chain’s Fraud Risk

Something’s Wrong in your Office. Is it Fraud?

Keep Fraud Out of Your Law Firm

Small Businesses, Big Fraud Risks

ROGER ROSSMEISL, CPA

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