Here’s How to Recover From Business Fraud
Unfortunately, business fraud is an all-too-common loss that businesses can suffer. Whether it’s internal or external someone could defraud your business in any number of ways. From stealing corporate credit card numbers to hacking data systems that contain sensitive customer information it’s important to know how to recover from business fraud. Here’s how you can clean up the mess and prevent future fraud.
Report the crime to law enforcement
First things first, you need to report the crime to law enforcement as soon as you uncover evidence of business fraud. If the crime originated on the Internet you can also file a report with the FBI’s Internet Crime Complaint Center (IC3).
Notify your bank, credit card companies, and insurance company
Next, it’s time to notify your bank, credit card companies, and any other affected service providers about the fraud. They made need to close some of your accounts, change your login credentials, and complete other tasks to mitigate any further damage.
You should also notify your insurance company of the crime to see whether you can recover any of your losses. Keep careful notes and document everything, including police reports, because the insurance company will want to see the proof.
If you can, prosecute the perpetrator of the fraud
A paltry 2% of small business embezzlement victims report the crime, even though 40% percent of small businesses say that they have been victimized. Small businesses are the most likely target of business fraud, yet they rarely try to prosecute.
Think about hiring a Certified Fraud Examiner (CFE) who can unearth proof of the crime that was committed. An investigation can help you determine whether or not you have a solid case and could bring you one step closer to recovering your losses.
Create a plan to contain the fallout of fraud
You’ll also need to contain the fallout and prevent any additional losses to your business. This is especially important if there will be negative press coverage surrounding the incident, like what happened with Target’s data breach. The company needed to implement a robust PR campaign to assure customers, and they needed to get it done quickly to limit further damages to their business.
Assess your existing procedures to identify any weak links
Address the weak spots from the current incident first before moving on to other fraud prevention measures, like more thorough fraud detection. If you were a victim of internal fraud you’ll also need to think about possibly changing employee roles, re-delegating responsibilities, and other prevention measures.
Recovering from fraud isn’t just about doing damage control. It’s also the perfect time to analyze your existing policies and procedures to identify weak spots that welcome fraudsters.