The Association of Certified Fraud Examiners (ACFE) estimates that all frauds against business cost 5 cents on every dollar. Insurance fraud is estimated at $80 Billion plus, and fraud against the IRS many times more. We all feel it through rising prices on goods and services, higher insurance premiums, lost personal income and savings, lost jobs, ruined credit, reallocation of essential government services, etc. Truly, it is everyone’s problem! What can we each of us do to reduce fraud?
The ACFE has studied the problem for more than 20 years, and one statistic is constant. Over forty percent of business and insurance fraud is uncovered and reported by employees. So how can that fact be leveraged? Immediately, you can have an impact by doing the following:
- As an insurance professional have a regular dialogue with insureds. A healthy corporate environment that encourages speaking up is key.
- As a business manager on the front line and in a position to establish fraud deterrence steps, recognize that continual education and strong communication with staff in this regard is critical.
- Zero tolerance and sending a loud and clear message, whether through litigation and/or publicity, is essential. Many in the insurance industry and the business community are hesitant to speak out in these ways, and as a result effective deterrence is muted.
Each of us can be a weapon in the fight against fraud. There is lots of deterrent information in the public sector, and in a variety of ways, each of us can register an impact, shift the tide and lower fraud. Business owners and managers must set the standards, provide tools and knowledge to employees to recognize and report fraud. Everyone must take responsibility since fraud reduction is a true cost savings puts money in everyone’s pocket.
Research North, Inc. (RNI), is a professional private detective service providing support to the business community, the insurance industry and individuals in Michigan and Wisconsin since 1981. The company also offers pre-employment background checks to small and medium sized businesses through a subsidiary called Backgroundcheckswork.com that is fully staffed by professional investigators who are retired from law enforcement.
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