Why do employees commit fraud? Is it because they are greedy or con artists? Do they possess some defect of character that separates them from normal, law-abiding citizens? The truth is that even good people commit fraud. Most fraudsters are not hardened criminals.
According to the 2004 Report to the Nation on Occupational Fraud and Abuse, only 12% of fraudsters had a previous conviction for a fraud related offense. Most employees who embezzle do not take their jobs with the intention of stealing from their employer. The largest hurdle for most employers is understanding that any of their employees are capable of committing fraud.
How can your dealership best protect itself against employee fraud? The first step is straightforward – don’t hire an employee who has previously stolen. Consider conducting background checks for any potential employee who will have access to cash, checks, credit card numbers, customer credit applications or any other items that are easily stolen.
Before you hire someone, consider the following preventive steps:
-Reference Checks
-Prior Employment Verification
-Drug Screening
-Criminal Conviction Checks and DMV
-Look at Credit Ratings
-Education and Certificate Verification
-Get the Candidate’s Consent
Although these steps won’t necessarily eliminate dishonest employees from getting hired, they will help weed out likely fraudsters. Intensive background checks will also communicate to workers you do hire, as well as existing employees, that your dealership takes fraud prevention very seriously.
Fraud is a cost of doing business that is not always known. We know about fraud only when it is discovered, and then it is usually too late to do anything to avoid disastrous losses. The most important line of defense in preventing fraud and abuse is to hire the right employees, and furthermore treat them fairly. Educate yourself and your employees about fraud and how to report it.
We can greatly assist your dealership by providing such antifraud services and education. Eliminating fraud completely is not possible, but with reasonable measures, its impact can be limited.
