Fraud Trends Examiner is a newsletter from The Whitaker Group, LLC. We
hope you find it to be both informative and beneficial.You have
received this newsletter because of our past business relationship,
introduction, meeting, or as the result of a training event
association.
We will be sending future issues periodically that will cover fraud
trends and prevention techniques, security consulting issues, as well
as various business management related topics and tips.
Please feel free to forward this newsletter to any other colleague that
you think may benefit from it.
Most businesses now have shredders as a staple in their
office environment. They are an inexpensive office
tool that protects the company from the inadvertent dissemination of
documents that contains proprietary information for individuals and
businesses. By shredding these documents into small cross cut pieces
that are all but impossible to reassemble, they are in essence
destroyed. Many governmental and non-governmental contracts require
shredding, or require the services of a reliable, insured and bonded
firm to perform that function. This action also reduces the likelihood
of documents being stolen or copied by employees, competitors, and
others. Most companies are now aware that many unscrupulous competitors
hire commercial espionage "specialists" to pose as cleaning
crew personnel, IT contractors, security guards, etc., for the sole
purpose of gaining access to restricted information.
It is no longer viewed as an "unforeseen
event" when information is somehow disseminated that should have
been protected. The company's liability is clear and the punitive
penalties are usually rather harsh.
Having said that, it is still disconcerting to us when
we find apathy in the workplace regarding this issue. Normally there
are controls and procedures in place to insure proper document
destruction takes place. However, here are just a few of the
issues we have found during routine security surveys:
New personnel charged with
document destruction aren't properly briefed as to the
"why" it is so important, but rather that it is just a
procedure to be followed.
Often times items scheduled
for destruction are bundled and "left overnight" to
"do it first thing in the morning". (obviously by the
next day they may have been copied or the information has
been transmitted elsewhere)
Items that have restricted or
even classified information are still being viewed and/or
processed by employees, contractors, or temporary employees that
are not cleared to perform these functions before it is eventually
destroyed (obviously the horse is out of the barn at that
point).
Persons charged with the
direct responsibility of destruction delegate that task to others
without authorization to do so.
Many organizations are not
even aware that new shredders on the market have the ability to
destroy CD's, DVD's, and floppy disks in addition to paper
documents.
Our
suggestion: review your policy and make periodic unannounced
inspections and follow up. That is far less costly and time consuming
than answering a complaint for a lawsuit and preparing for litigation.
This
is one of those office functions that becomes routine and mundane,
so often times the policy adherence "falls off". Don't allow
this to occur - not only is it irresponsible as a business partner, the
cost to the firm's reputation and bottom line can be devastating.
Our firm is dedicated to fighting fraud and providing
contemporary security management expertise and investigation
solutions for any size business. To learn more about our firm and
the services we provide, just click on our website link under Quick Links on
the right side of this page.
Thank you for taking time out of your busy day to read
this newsletter. I sincerely hope it has served as an informative
resource and has provided valuable information you can use. We welcome
any suggestions or ideas for future articles or other information
sharing ideas. Anything that benefits you, your clients or
colleagues, either directly or indirectly, is well worth the effort put
forth to disseminate it.
Sincerely,
James
E. Whitaker, CFE, CPP
The Whitaker Group, LLC
The
Whitaker Group, LLC offers a
comprehensive review of existing policies, procedures, and protocols
for any size or type of business. We specialize in auditing your
existing or proposed infrastructure for SIU Operations; existing
security and/or corporate security operation either propietary or
contracted; security and facilities management concepts and strategies;
cash handling, accounts receivable/payable, and vendor interaction
procedures; as well as a complete policy review regarding employee
safety and workplace violence and harassment related issues.
Many companies
rely on security vulnerability assessments that were conducted years
ago, if at all. In today's rapidly changing workplace environment, the
potential risks can be greater than ever before. We will assist your personnel
in identifying those potential risks and help develop strategies to
mitigate them more effectively. We can assist your staff with
understanding the potential risk vs. effectiveness of conducting your
own internal investigations. As a result, your staff will develop more
effective solutions to avoid many of those inherent risks and still
arrive at an acceptable resolution to the conflict.
Annual insurance fraud losses for a just some select
categories in the U.S. are estimated to breakdown as follow:
Automobile fraud - $12.3
billion
Business and Commercial
fraud - $1.8 billion
Homeowner fraud - $1.8
billion
Life and Disability
fraud - $1.5 billion
In addition,
false claims in the healthcare industry for the U.S. results in an
annual estimated $54 billion in losses.
Quote of the Month
" The difference in
companies is people. I would rather have a first-class manager running
a second-rate business than a second-rate manager running a first-rate
business."
