Fraud Happens. We Know It Does. Here’s How You Can Protect Yourself!
Most businesses and nonprofits experience fraud in one of two ways: occupational fraud or embezzlement occurring inside the organization when an employee, board member or volunteer misappropriates assets; or consumer fraud when a customer, donor or someone outside the organization steals assets from the organization. Here are some concrete precautions every organization can take to safeguard against fraud.
1. Automate all donor or member payments
2. Create controls for checks and ACH payments
- Limit the number of officers who have access to accounts
- Require multiple approvals for payments made by check
- Block ACH payments – this lets the bank know that electronic payments made using the bank routing number and the account number are unauthorized
- Use a prepaid debit card to make vendor payments
3. Establish rules for communicating and storing sensitive information
- Never send passwords via email
- Use only https:// websites for sensitive information. You can confirm if a website is secure by verifying that “HTTPS” is present at the beginning of the URL.
- Clean house periodically – shred documents and close unused accounts
- Regularly change passwords (make sure they are alpha numeric and contain characters)
4. Develop a system for investigating irregularities
- Create a security SWAT team
- Make investigating irregularities the team’s top priority
Want more fraud prevention tips? Download our free eBook “Fraud Happens: A Practical Guide to Reduce the Risk of Fraud” for three simple concepts to keep your organization’s dollars and sensitive data safe and secure.
This article was originally written for MJ Insurance‘s Sorority News & Notes Business Partner Spotlight that was sent on July 6, 2015.