Top 10 Anti-Fraud Resolutions for 2014

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Firestorm Expert Council member Anyck Turgeon on why you should consider taking anti-fraud resolutions in 2014:

  • 1 in 3 persons are affected by fraud yearly
  • According to ACFE’s Survey to the Nations, fraud equated to 5% of global GDP (2012)
  • Per Havescope, black market activities have sustained revenue growth of 1.6%
  • As reported by IAFCI, 95% of victims are unable to receive total assets recovery
  • Hence, as it is best to prevent against illegal white-collar activities, here are ten simple steps you can take to protect yourself:

Hacker11)    BE PRO-ACTIVE: Because the typical cost of a civil fraud lawsuit is $1M US, and a case takes three to five years to prosecute in court, 99% of fraud lawsuits are resolved through mediation or arbitration and assets recovery rarely occurs (e.g., less than 5% of cases secure recovery and, most often, partial recovery takes many years to decades), most individuals, corporations, and even governments do not have the financial, time, or emotional resources and political clout to prosecute criminals (e.g. in Huffington Post article: “Eric Holder Admits Some Banks Are Just Too Big To Prosecute”, “fail or jail”). A simple approach such as reviewing your bank and credit cards accounts online on a weekly basis and reconciling printed statements monthly can save you many headaches and avoid unnecessary losses. White collar criminals may start charging your accounts small amounts of money and, if it goes undetected and unstopped, the fraudsters will just keep on stealing more. Be diligent and invest a little time weekly to review your financial records.

2)    LEARN ABOUT FRAUD: There are so many different types of fraud emerging daily that are not or only partially covered by the general media that it is best to be pro-active in your learning approach about personal and corporate finance, taxation and technological reconciliations of your accounts and inventories. Given that trusted employees are the primary source of corporate fraud and bank robberies have been decreasing by 90% in favor of cyber-crime (according to the British Bankers Association and mirrored by the FBI), industry reports show that one person in three is affected by fraud yearly and the prime victims of white collar crimes are corporations as well as elderly and sick individuals needing healthcare.  Counterfeit card skimming, card-not-present (CNP) and cross-border payment cards fraud are expected to keep on flourishing in 2014. Articles like the “27 common scams to avoid” published by the Guardian demonstrate the on-going creative nature of fraudsters and their undiscriminating approach to stealing your money directly from your bank account or, like in the case of the recent Target credit card breaches, from the strongly-encrypted corporate databases or your own email.  To learn about the latest scams, it is best to subscribe for free daily notifications such as the ones provided by DigestDaily at Furthermore, you may want to obtain magazines that cover the latest fraud trends scams and detection solutions from the Association of Certified Fraud Examiners (ACFE) to learn about the latest illegal shell companies or healthcare schemes.  You may also want to join anti-money laundering forums from professional organizations such as the Association of Certified Anti-Money Laundering Specialists (ACAMS) to learn about money laundering activities such as terrorism financing from your donations to religious organizations, disaster funds, and charities.

3)    USE WIRELESS TECHNOLOGIES CAREFULLY: Given the recently reported architectural security deficiencies of mobile devices and wildly discussed issues concerning privacy breaches, you may also want to read tech magazines on how to best segregate and protect your personal information from your corporate data and from mobile device hackers. Most fraud in 2014 is expected to occur against consumers using un- or under-protected mobile devices as well as through smartphone applications. In many cases, it would be best to perform all financial management and verification activities through technologies not connected to the Internet, different secured and digitally audited devices or with different log-ins specific to profiles separatedHacker2 by layered access controls. Using swappable drives with different security architectures, ensuring regular backups of critical information on different media and enhancing your security practices to a minimum of two-factor identification (including biometric-required identification) may be a good way to protect yourself, your enterprise, your legal evidence, and your assets. Inform immediately your service providers upon phishing, squatting water-holing, pretexting, virus attacks and other devious practices, activate temporarily your audit trailing capacities and ensure that your tech resource reviews all activities for legitimacy with you.  Most importantly, make a practice of changing sporadically your passwords to a combination of letters (including some capitals), numbers and special characters (example %NoFraud2014%).

4)    SET-UP ALERTS: Although fraud-monitoring services offer some protective assistance, it is best to take the time to set automatic alerts on all your accounts. Fraudsters prefer easy targets and are often easily deterred by any difficulty in getting to your funds. For instance, if one is trying to purchase computers in Toronto, Ontario (Canada) when you reside in Austin, Texas (United States) and have not authorized out-of-country expenses, this transaction should be stopped until fraud specialists at your credit card company reach you and receive authorization for such type of purchase. Typically, you are more protected using a credit card to make purchases than a debit card and, although cash is king, it may be hard to obtain a refund once your dollars, euros, or other currencies are gone. So, take the time to set up alerts on all your financial accounts and define a payment strategy that will protect you.

5)    UPDATE YOUR CODE OF ETHICS, HR POLICIES & PRE-EMPLOYMENT PROCEDURES: Because crime is rising and fraudsters are typically first-time offenders presented with an opportunity to make quick untraceable money, ensuring that your code of ethics and HR policies are updated yearly is critical. Not only should you meet to discuss the changes to these latest documents but, it is also a good practice to get employees to sign a summary agreement which confirms their understanding of their obligations and willingness to comply to the latest corporate practices.  As part of your HR policy, specify site or employee videotaping, investigation, and privacy policies. Like many organizations, you may also add the requirements of yearly background checks. At a minimum, yearly background checks should be performed on all executive, finance, and accounting staff, with particular focus on spending habits and cost of living. Higher-minded security-focused companies requiring psychological evaluations of staff may want to include tests related to situational ethics to assess the risk and crime-mindedness of candidates and employees.

DigitalInventory6)    UPDATE ALL DIGITAL COPIES & EMERGENCY LISTS: Because white collar crimes such as identity theft, bank account money clearing, and human trafficking happen at all times of the day, in all parts of the world, it is important to make a copy of all government-issued identities, credit cards, and banking/ATM cards and keep them available for emergencies. Depending on the type of crime committed, you may only have seconds to protect your assets. Your response time will depend on the people you can reach rapidly such as the fraud departments of your credit card companies, special federal government units such as the FBI, and local law enforcement. Having a list of five to ten contacts that have known you for at least three years and can attest to your identification yearly is critical. For instance, in the case that your passport or wallet is stolen while on a business trip, a consular representative will need to speak with your contacts (often after hours) and confirm your identity to issue a temporary passport. Don’t be caught without being able to securely access this information at all times, wherever you are. Keeping all records in safe locations such as in a durable water-resistant and floatable case for physical documents (available as part of the Suze Orman Protection Plan) or safety box at an insured bank with low break-ins (note: check if your bank is insured for the content placed in your security box) and, for digital assets, on a secured exclusively country-managed cloud is a good practice to adopt now.   

7)    UPDATE YOUR INVENTORY: Take pictures yearly of all of your assets with indication of their original, market, and replacement values. This includes taking pictures of all content in your house, cars, boat, plane, and other valuable assets. Keeping detailed and up-to-date information about all your physical assets is very important as well as having recent pictures of all family members. You should also keep a digital inventory of all critical documents such as investments documentation, trusts and wills, insurance, etc.

8)    KEEPING UP WITH LAWS: Because the legal burden of fraudulent activities proof differs by region and type of lawsuit, you need to keep learning about all legal precedents as well as the laws of all countries you are visiting. For instance, preponderance of evidence is a great standard to prove fraud cases in civil US courts but would not suffice in criminal or international courts. Sites such as will provide you with access to specific legal case documentation, and organizations such as the International Association of Privacy Professionals (IAPP) are excellent at providing daily updates on privacy laws, standards, and regulations on an international level as well as locally.

9)    FRAUD DETECTION RATIOS: Small to large companies need to protect themselves. Because most corporate fraud is committed by staff handling corporate finance and accounting (often in collusion with auditing firms), it is best to learn to perform fraud financial ratio analysis or hire professionals to perform this task. Certified staff with numerous verified qualifications (such as Certified Fraud Examiner from ACFE, CFCI from IAFCI or certified fraud specialist by‎) and references will save you a lot of money performing such tedious analyses. It can also be economically beneficial to hire these different groups of professionals by project to avoid collusion and detect co-mingling.

10)    THINK LIKE A CRIMINAL: White-collar criminals are all around us and, given the right temptation, could be any one of us. As most fraudsters enjoy using this particular mental power game to demonstrate their self-proclaimed superior intellect, it is best to look for common white-collar criminal personality traits early on. Fraudsters have a higher education, typically have easy access to corporate funds, plan their schemes well in advance, often believe that they are temporarily borrowing corporate funds to resolve personal financial issues, and suffer from questionable situational ethics. The most repeated reason employees steal from employers allegedly is that the employer did not care enough about their employees and appeared to have excess money so temporary loans would go undetected. Thinking like a criminal will give you the opportunity to institute and reinforce corporate controls.
Given economic pressures, companies and law enforcement agencies have to cut costs globally. For more information about issues related to recovery of stolen assets, you may acquire a book written by the victims of Madoff that comprehensively points out how the SEC and FINRA “have done nothing for the victims”: The Club No One Wanted To Join-Madoff Victims In Their Own Words (available on Amazon). Without being able to rely on governmental agencies to be able to assist you, it is best to become pro-active in protecting your assets. The year 2014 will continue to show an increase in white-collar crimes, so it is your responsibility to ensure your corporate and long-term personal survival. A few minutes spent on monitoring your assets daily may save you and your organization millions yearly. The time to pay attention to your assets is now. For more information, please contact Anyck Turgeon via Firestorm

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