Fraud isn’t
something anyone likes to think about, and being stolen from or deceived can
cause negative effects for you or your business for a long time. While many of
us are familiar with safety precautions such as secure online checkouts,
protecting our bank information and being wary of spam ‘bank’ emails, fraud
uses many methods, and they’re becoming increasingly sophisticated in our
technological age.
While a
company or business is sure to take every step to protect themselves, if the
worst does happen and you find yourself a victim of fraud, luckily there are
professionals available who can help. A fraud lawyer can offer practical help
and advice, including how best to protect your company from potential fraud, as
well as fighting a case on your behalf if you have been defrauded or accused of
committing fraud. If you’d like to know more about how to protect yourself, or
the type of legal advice available, read on for our guide explaining what fraud
is and how fraud lawyers can protect your business.
What is fraud?
An official
dictionary description of fraud describes it as, ‘wrongful or criminal
deception intended to result in financial or personal gain.’ There are of
course many different areas and scales of fraud; from a multi-million pound tax
scam, to types of petty fraud like sending out fake emails or letters to try
and extort small amounts of money from people.
Fraud can
also be split into different categories depending on the method and who it
affects; such as business fraud, personal fraud, report fraud, and online fraud
and cyber crime. We will be focusing on business fraud in this blog, but of
course there are similarities between all the different types.
Business fraud
Business
fraud can take many forms, and the impact on individuals and a company can be
devastating, no matter how big or small the business is. This type of fraud
often involves scammers lying about their intentions, products or services, in
order to cause a gain or a loss for your business. Fraudsters can come from an
external source (such as a fake company trying to sell you products), or
internally (such as a staff member fiddling the books to pocket some extra
cash).
How can fraud affect a company?
Fraud can
have many practical and emotional consequences for you and your business; from
loss of money, to loss of reputation and a lot of stress and reduced morale for
employees. We will explore some of the reasons in more detail below.
Financial loss
As you might
expect, one of the most devastating impacts of fraud is a loss of money for
your company. This can take many forms; from an employee stealing petty cash
from the till, to spending money on false products, or an ongoing scheme which
siphons money away from the business. Financial losses can have a big impact on
your business, even if they’re small, and stolen funds reduce a business’s
ability to pay bills, order new stock and pay staff, as well as causing a lot
of stress about how you’ll keep the business afloat.
Loss of trust
Discovering
that you’ve been a victim of fraud can drastically affect the level of trust
among employees, and it might also affect how external customers view your
business. Companies may find it difficult to hire or trust new employees, and
the public opinion of your business could be damaged - even if the fraud was
not your fault.
Increased audit costs
An audit is
a close official inspection of an organisations accounts, and any fraudulent
activity will mean a company becomes classed as a high audit risk. This means
that your financial records will be scrutinized more carefully before auditors
sign off the business’s financial statements. If an auditor has to take more
time or perform more procedures then this increases the cost of the audit,
losing your business yet more money.
Reduced morale
Fraud can
shatter a company’s morale in a serious way, especially if internal employees
or management were responsible for the fraudulent activity. This can be felt
more keenly if the business is small and employees work more closely with each
other, and your staff may feel they’ve been tainted with a bad reputation, even
if they weren’t involved.
How can you protect your business?
As you can
see, fraud is a serious matter than can have a very negative effect on your
business in several ways. Luckily, there are steps you can take to protect
yourself, and reduce the chances of your business falling victim to fraud.
Hiring a lawyer who specialises in business fraud is one of the best things you
can do, and they can advise you on ways you can protect your business from
fraud, as well as taking practical steps to help if fraud has occurred.
Below, we
will discuss some of the ways a fraud lawyer can help your business, as well as
other steps you can take to protect yourself.
Be sceptical
While taking
risks in business can pay off in some instances, it’s wise to be sceptical if
an offer seems too good to be true. Employees should think carefully when
considering any deals, documents, products or transactions that seem
suspiciously cheap orif they seem like an unrealistically good deal.
Identify any vulnerable areas
Any good
business owner should know their company inside out, but it’s important to make
regular reviews and identify any vulnerable areas of your business. Think about
how potential fraudsters could target your business; either externally or
internally, and take steps to secure online systems and ensure your employees
know what to look out for. A fraud lawyer can help you identify any weak spots,
and offer professional advice on how to secure them.
Increase your cyber security
The vast
majority of the world’s data is now stored online, which means that cyber
security measures are more important than ever. Make sure you regularly change
your passwords, keep software up to date, and install or update any firewalls
to protect your connections. You should also use encryption for any sensitive
information, keep your antivirus programmes updated, and ensure any business
activities are made using a secure web browser at all times.
Understand your finances
Any staff
handling a business’s finances or transactions should have a full understanding
of how money is transferred to and from the company, including the methods of
payment, who is authorised to make those payments, and ways to check that
payments are legitimate.
Conduct regular audits
It’s good
practice to hire an external accountant to regularly audit your company’s books
and make sure everything is above board. Audits can be conducted monthly,
quarterly, twice yearly, or yearly, and they’re a very efficient way to ensure
that your business's finances are accurate, as well as complying with any laws.
Regular audits can also identify any discrepancies in the finances, and ensure
these are sorted before they escalate.
Develop an action plan
While it’s not
something businesses like to think about, it’s wise to develop an action plan
to prepare you if the worst should happen. Take time to research fraud lawyers
in your area, and take the time to put steps in place to minimise your losses
in the event of fraud.
Hire
a fraud lawyer
A fraud
lawyer will be able to offer specialist advice if you have been a victim of
fraud, and give their professional opinion on what you should do regarding
restraint of assets and potential confiscation proceedings. Either of these can
be very damaging to your business, but an experienced lawyer will be able to
help you plan the best cause of action and minimise losses.
Fraud
lawyers will also be highly experienced when it comes to crisis management, and
can take every step to protect your business’s reputation following a fraud
case.
If you’ve
been a victim of fraud, or simply want some advice on how to protect yourself
from potential fraudulent activity, get in touch with Lefevre Litigation. Our
highly experienced team are on hand to offer legal advice, help you obtain the
best possible outcome, and protect your reputation if you find fraud charges
brought against you. We deal with a wide range of cases; from identity theft,
to criminal fraud, business fraud and more.
We’ll be
there to assist you every step of the way, including how to handle any
potential media scandals, what to say to public officials, how to minimise your
losses, and how to ensure your reputation stays intact. For more information
about any of our legal services, give us a call today or visit our website.
