In the tech world, fraud seems to be EVERYWHERE. Incidents of employee theft, hackers, and other forms of fraud are common across the industry — and this trend is likely to continue, as the FBI reports that cybercrime has tripled in the past five years.
For tech business owners, the fight against fraud may feel like a lost cause. But don’t give up just yet! There is something you can do to promote a more ethical corporate culture within your organization AND stop fraudsters before they can get away with their scheme. All you have to do is set up a fraud hotline for your business — and we’re here to tell you how.
Why Your Tech Company Needs a Fraud Hotline
You might be wondering why you even need a fraud hotline. After all, your business isn’t dealing with fraud; your employees would never do something like that! We know it’s easy to have trust in your workers, but the fact is that fraud can happen to any organization, and anyone can be a perpetrator.
A hotline is a simple precaution you can take that offers a world of benefits (including the following).
Hotlines Give Employees Anonymity
One of the biggest reasons an employee doesn’t speak up when they witness fraud is because they are afraid for their jobs. This goes double if the fraudster is a manager or higher; employees don’t want to risk losing a promotion in the future because they “tattled” on the boss.
With a fraud hotline, your employees have the power to speak up without the risk of retaliation. This makes them more comfortable with reporting fraud when they see it — and that means you’re more likely to catch bad actors before they get away.
Hotlines Help You Investigate Misconduct
Here are the facts: everyone working in your office has a lot on their plate. Whether it’s work projects, family obligations, or simply something they read in the news this morning, every single employee is busy with their own growing to-do list.
So what happens when an employee does report fraud to their supervisor or manager? If they didn’t report directly the incident to the person in charge of investigations, probably nothing.
Hotlines eliminate this problem because getting fraud reports to the correct party IS the operator’s job. With a hotline on your side, your HR department is far more likely to receive reports of fraud than they would without one.
Hotlines Work
Finally, let’s discuss the greatest benefit a fraud hotline could bring your organization: less fraud. According to the Association of Certified Fraud Examiners, hotlines reduce a company’s median losses by 41%, and they reduce the duration of fraud events by 50%.
These figures alone should be enough to sell you on the need for a fraud hotline — but how do you set one up for your company? The best way to do this is with a third-party vendor.
How to Find a Hotline Vendor
Third-party vendors are a great tool for any organization that wants to establish a fraud hotline. These professionals don’t have an emotional interest in your organization the way employees do, and therefore they can pursue grad cases more effectively.
But how do you know which vendor to hire for your hotline? Here are a few considerations.
Your Budget
First, it is important that your hotline vendor doesn’t put your organization in the red. Make sure you find a company that will provide the services you need at a budget you can afford.
Their References
Anytime you work with a contractor, it’s wise to ask for references from their past clients. This will tell you everything you need to know about the quality of their service, what it’s like working with the vendor, and the benefit they provide other organizations. This information can be very helpful for making your decision.
Your Contract
Once you find a vendor you think you like, make sure you take the time to review your contract carefully. Will the hotline provide reporting services? Is there a termination fee if you decide to end the contract early? Make sure the terms of your contract are exactly what you want before you set up anything.
Setting Up the Fraud Line
One of the best things about working with a third-party hotline vendor is that they handle most of the setup. However, this doesn’t mean you are completely off the hook — especially when it comes to preparing your employees to use the hotline. Here are some of the steps you need to take.
Meet with Your Vendor and HR
The first thing you should do to set up your hotline is sit down with your vendor and your HR team. This is the time to review the contract, discuss any concerns, ask questions, and finalize everything related to your new fraud hotline.
Spread Awareness About the Hotline
Once everything is approved by HR and your vendor, it’s time to inform everyone about the new hotline. Send a company-wide memo alerting employees of the new hotline and clearly explain how it should be used. This is also a great time to announce training days if you plan to do additional training on fraud (which is always a good idea).
This is also the time to make sure everyone knows the fraud hotline number. Create signage with the number around the office, and include it in your memo to employees. This will make it a little easier for employees to remember and adopt the hotline.
Train Your Employees
Finally, the last thing you will need to do is train your employees on using the fraud hotline. Make sure everyone understands what fraud looks like, the “red flags” they should be watching for, and when and how to call the hotline to report something they saw. Use this training to officially establish a culture of ethics and honesty within your office. Make sure everyone knows just how important it is to report incidents of fraud, and how calling the hotline can make a difference. If everyone understands the value of the hotline, they will be more likely to use it and prevent fraud from costing your company.