Lounge Chat: Foiling the Fraudsters
Author: Jana Greig
Investigating fraud requires finesse and intentionality, but what does that entail? What should you do if you suspect fraud, and how can you avoid it in the first place? BKD’s Lounge Chat, “Foiling the Fraudsters,” led by BKD Director Bryan Callahan focused on what to do if you suspect fraud, new trends in fraud schemes and ways to avoid fraud in your organization.
“I was recently told you should do one thing every day that scares you,” said one Lounge Chat attendee. “But after this (fraud discussion), I’ve been scared enough for one day.”
Other attendees agreed, but you don’t have to fear fraud if you’re prepared and informed. Here are some key questions and tips shared during the Lounge Chat to help you foil fraudsters.
What should my priority action steps be if I suspect fraud?
If you find or suspect fraud in your organization, focus on building a case against the fraudster, prepare for a successful insurance claim and manage the damage. First, resist the urge to confront or fire fraudsters—they are your No. 1 witness. Build a “cage” around them by monitoring their activity to build your case. If you confront them with evidence, you can do a lot with a confession. Next, don’t call your insurance company until you’ve investigated, compiled evidence and are ready to submit your case, which should meet the insurance company’s notification deadline. Once your insurance company is notified, you may lose control over the investigation or the decision to press criminal charges.
What are trendy fraudsters up to today?
More and more, the fraudster is someone you least expect and isn’t always an outsider. He or she is typically an employee with six to 10 years of experience at your organization. Other trends include spending embezzlement or markup schemes, more sophisticated phishing schemes and trustees misusing trust funds.
What red flags should I look for?
One red flag is lifestyle clues. Is someone suddenly living beyond his or her means, e.g., showing up with an expensive car or jewelry? Fraudsters typically like to show off.
What’s an effective prescription for fraud prevention?
A fraud reporting hotline is the No. 1 method for fraud prevention. Someone may know something and help stop fraud early if allowed to anonymously report it. If you already have a hotline, be sure to promote it so employees know it’s an option. Another effective method is data analytics. Proactively monitoring employees through data analytics can help catch fraud early.
Where should cybersecurity prevention fall on the priority list?
This should be a high priority. Senior living providers hold highly valuable protected health information, making them susceptible to rampant cyberattacks.
What tips can you share with your residents to help them avoid fraud?
Unfortunately, elderly residents are a major target for fraud schemes. Remind them to avoid opening questionable attachments or clicking on hyperlinks on webpages, such as “click here.” They also should be wary of random or unexpected calls, emails or texts asking for personal information or money. If a caller asks for either, request the company’s name and hang up. Residents can then look up the company’s phone number and call back to verify the caller’s story. Don’t use the number the caller provided.