Reduce False Positive Rate by Working with Experts in Anti-Fraud

 

Fraudulent activities can occur at any time, and, in the current economic environment, the risks of fraud and corruption could increase due to the financial pressures that employees and business partners may feel and because of a weak control environment that could create the conditions for deviations. Thus, management teams should consider improving the level of awareness of fraudulent behavior within the organization so that each employee can be more vigilant and more likely to report attitudes that have the potential to be unethical. To reduce the false positive rate of fraud attempts, you need to work with experts in the field.

Identifying fraud in its early stages is possible by observing red flags in several company areas. For example, in the purchasing department, indicators of suspicion may include unjustified price increases, a potential close relationship with a supplier that is not commercial, communication with a supplier through a single employee, unjustified loans or payments in advance to a supplier, collaboration with suppliers who have little visibility and experience in the market or with those who are dependent on the organization, or, of course, information received from an employee regarding potential irregularities noticed in the activity of a supplier.

Reducing the False Positive Rate

Corroborating red flags with information obtained from discussions with employees and verifying supporting documents or data analysis is essential for describing the overall picture of a potential fraudulent scheme. When talking about fraud prevention, companies must understand that management teams must have an appropriate attitude toward fraudulent behaviors. Better said, the company’s leadership should take a firm stance on fraud and communicate to all their employees that their company has zero tolerance for fraud. Asking experts in anti-fraud to help you in this situation will result in a false positive rate reduction in no time.

Another effective fraud deterrent is a robust control mechanism that implements appropriate policies and procedures and adequate controls to prevent errors and potential fraud within the company. It is also essential for a company to consider adopting a fraud response plan if such events occur to identify what happened and the extent of the fraud and take further steps to recover losses. Additionally, this plan will help reinforce the company's zero-tolerance-for-fraud policy. Another essential element within a company is employee training.

Given that it is preferable for an organization to prevent fraud rather than manage its effects, a robust internal fraud awareness training system can lead to increased effectiveness in fraud detection and prevention. Considering the dynamic way of working in recent years, combining remote and office work, most companies can now choose educational programs using eLearning platforms and instructor learning sessions. Once employees complete anti-programs, the organization will likely prevent, identify, or report any potentially fraudulent activity. Such training is essential as it is challenging for anti-fraud specialists to reduce the false positive rate when scammers find new ways to cheat people daily.

A Fraudulent Action Can Occur at Any Time

In unfortunate situations, organizations should consider seeking the assistance of fraud investigation and prevention experts to guide their compliance and risk mitigation efforts. Business fraud generates trillions of dollars in losses globally each year. Something that experts can do to significantly have an impact is reduce the company's reputational risks through the recruitment process. While there are several 'checkboxes' to consider when hiring, one often overlooked is the screening of prospective employees. However, before delving into the importance of screening, it's beneficial to define the concept.

Employment screening is a proactive procedure that firms use to validate that a person is who they claim to be by checking the information provided by the candidate in the CV against official records and public or subscription-based sources and, if applicable, requesting references. This process is the best preventive measure to avoid fraudulent behavior in a company, helping you to know if the candidate should be hired. Employee background checks, or in this case, employment screening, are instrumental in reducing potential fraud and workplace irregularities.

Types of Checks That May Be Carried Out by Local Law

It would be best to consider different things when screening individuals from several countries, as each state has different laws and standard practices. Therefore, different checks must be carried out. It may seem drastic, but it will help reduce the false positive rate. The legislation must be more balanced about the verification procedure for recruiting future employees. Although the law allows them, references and recommendations from other jobs are rare. And if you get them, they are about the job and how well he did it.

Depending on the job the future employee will be having the screening can be about elements such as residential history and verifying identity using ID, passport or birth certificate, address; if he can work in a particular country or not; verification of the educational course; work history, by checking previous employments; verification of criminal antecedents and possible disputes; analyzing any negative media coverage, including allegations in news publications or other reputable sources, linking the person or a company affiliated with them to money laundering, terrorism, fraud, and other illegal activities.

Reducing the Risk of Fraud

Regardless of the scope, employment screening must be carried out reasonably by labor laws or anything specific to each geography. Companies have the obligation to protect themselves, secondly their employees, and of course, their customers, too. When a company neglects to conduct adequate screening upon employment, and a few months later, the new employee commits wrongdoing, possibly an act that sometimes, in the past, he did as well, the business can suffer financial and reputational damage.

In conclusion, when you hire someone, be careful who you choose because if he doesn’t comply with the company’s values, he will ruin your brand's reputation.  Instead, a cautious, preventive attitude can protect not only your business and your brand but also all your employees. Therefore, you should consider employment screening as one of the business's first lines of defense. Anti-fraud experts do their best to implement strategies that have. As a result, a reduced false positive rate and their clients being more careful about using all their data can help a lot with that.