Financial Fraud: 5 Necessary Tips To Know

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Posted on Jan 19, 2023 at 09:01 PM

As everyone knows, most businesses and professions are exposed to various scams, the most famous of which today is financial fraud, where fraudsters directly steal money from companies such as burglaries, embezzlement, hacking of the company's website, indirect transactions such as illegal financial transactions or theft of customers' data and public and sensitive information.


Recently, fraudsters have been developing the technology, methods, and methods they use to defraud companies, perhaps most notably cyber-cunning, learning new ways to hack companies and steal money, and overcoming cybersecurity protection no matter how powerful!


It is worth noting that many measures can be taken to avoid financial fraud and fraud on you. We will discuss this in the following lines, where you will learn more clearly what financial fraud is with some live examples and practical tips to avoid or combat such fraud. Read on.


What is Financial Fraud?

It is a form of fraud that involves the practice of twisted methods such as deception and lying to obtain valuable things from others, such as money.


Victims of financial fraud are different; The victim may be an individual, enterprise, company, or group of companies; regardless of the victim, most States seek to combat financial fraud by imposing harsh joint penalties against persons who engage in any financial scam.


There are also several cases or types of financial fraud, the most famous of which may be the misappropriation of funds at the enterprise and corporate level; the following paragraph will give you a deeper understanding of these types.


What are the types of financial fraud?

As mentioned above, there are a lot of crimes within financial fraud, and these lists most notably:


  • Embezzlement in companies or institutions:

It is one of the most popular types of financial fraud, where a large proportion of companies worldwide (about 70%) suffer from such fraud. In addition, their annual losses amount to a considerable amount (approximately $50 billion). Fraudulent operations may occur from any employee in any office within the company, so the issue of employee selection methods must be carefully scrutinised.


  • Fraud by sending fake messages:

Fraudulent employees of this type may send a fake invoice. Still, it is formal to steal the victim's money, and fraudsters can also send messages of a formal and legitimate nature that may be text messages, social media, or emails; after the victim presses a specific button, information is collected. It is used to steal money from citizens, exceptionally less experienced citizens.


  • Fraud from fictitious bank employees:

Fraud can occur within banks according to many services and methods. For example, a phone call may come from someone claiming to be an employee of your central bank, giving you some personal information to assure you that he is an employee of the bank and, in turn, providing financial information about your bank account.


Another example of employees who have been fraudulent within banks is if you work in the bank, a customer may use a forged or stolen credit card. When checking and using credit cards, care must be taken to detect and falsify the fake.


  • Cyberattacks on the website:

Some hackers may target the company's website for financial fraud or control of customers' financial statements, so the website must be protected against cyberattacks.

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What are the top tips for avoiding financial fraud?

After providing many examples of financial fraud, here are the best tips that will help you set up the best system to avoid various types of fraud:


1- Immunise and protect your e-business:

It would be best if you fortified your e-business, such as the website or computers within the company, against various hacker attacks aimed at financial fraud on the company, such as encrypting the data of your customers and employees, maintaining antivirus software within the company's computers, establishing a strict system that forces all employees to put up complex passwords and let them change them within specific periods.


Hackers may also seek to defraud you financially by hacking and controlling your site, so it is essential to create a backup of the files you work on in your area periodically, thereby storing this version somewhere offsite, enabling management and employees to recover all files without any harm.


2- Staff education on financial fraud:

According to a survey published by Kaspersky, companies are 52% at risk from within!

One of the most critical factors that help you stand up to financial fraud is establishing a robust e-business system that is insufficient if the employee is less educated about financial fraud. Therefore, it is always recommended to conduct training courses and awareness programs and to familiarise employees with financial fraud and its risk to companies, especially in recent periods.


3- Protection of the company's bank accounts:

When you start dealing with any bank or bank, you should determine directly what transactions any employee can make with the bank and what transactions cannot be performed without your consent; this will help you protect the company against various types of bank financial fraud.

Economists always advise that your business bank accounts are different from your bank accounts. If Hacker controls one of them, he will not have access to the other.


4- Protect your Points Of Sale:

If your company owns a centre or sells centres in specific locations. Then, it would be best if you protected it against financial fraud, which is done by employing people with good experience in working faithfully, checking equipment and devices at the point of sale periodically, and verifying all paper transactions within these points.


One of the essential things in protecting against financial fraud is to store basic listings, tables of information, or paper and electronic documents in places people can't access. Fortunately, using the accounting information system will help you store records digitally. When the need for these documents ends, they must be destroyed appropriately.


5- Purchase Insurance:

Whatever protection you have, there is no guarantee that things will be good when you are fraudulently attacked, so you need to buy insurance to compensate for your company's losses due to the attack.


Anti-fraud experts advise obtaining various types of insurance as much as possible, including disown insurance and breach of trusts such as embezzlement, as well as securing thefts such as theft of identities or credit cards.


In conclusion, it should be ensured that, as financial fraud does not end, ways of fighting and protecting against it do not end. Therefore, we address you to attend courses, including accounting training courses Paris, to obtain more information about financial fraud and to learn about its modern methods and how to address them.