Anyone can retroactively examine characters such as Bernie Madoff or Charles Ponzi and wonder how anybody could fall for such a scheme. Most business owners think they would see right through it. While that may be the case, those who were conned did not see through it. There are several ways in which businesses can be scammed without knowing it.
Many businesses are vulnerable to threats because they are just unaware of the different forms a scam takes. Not every conman is named Tom Sawyer. Many of these risks and potential white collar crimes require discernment. There are at least four ways your business is at risk from white-collar crime.
Who Has Power of Your Finances?
While an employer does not want to be suspicious of their employees, sometimes they must resort to that. Employees will apply every manner of moralization to justify unethical behavior. If a company has put all of their finances into the trust of a single bookkeeper, there is nothing (aside from the integrity of the bookkeeper) to keep them from stealing from their own company. If there is just one person who handles bookkeeping, your business could be at risk. Also, consider the safety features of all your point of sale systems.
Vendors Who Do Not Provide a Product or Service
People are often looking for an opportunity to make a few extra dollars. They might offer some service or product at a discounted rate, knowing that they are defective. When they receive a complaint or a question about it, they will simply plead ignorance. Companies are often far too quick to do business with vendors.
Selling Property Without Disclosing Hazards
On the hit television series, Breaking Bad, a car wash owner was informed that his property violated several environmental laws and this would cost him thousands of dollars. In an effort to save the money, he sold the car wash to unsuspecting buyers. Buyers may be quick to accept this because the property is offered at a low rate.
Cooking the Books
Running a business can be difficult. Most entrepreneurs are not successful. Some have a temptation to portray their finances in a rather misleading manner. They will manufacture fraudulent income in their reports. But this is an illegal maneuver. Bookkeepers would be particularly vulnerable to considering this, as well as members of upper management who wanted to portray glowing financial reports for their employer.
White collar crime could be a huge risk to your company. Internal theft is extremely common, and cybercrimes and are the rise. Protect your business with proactive plans.