Fraud Hotline Reports Increasing
A recent hotline tracking report of fraud hotline incidents as a total of all reported hotline incidents and the total absolute number of fraud incidents shows that this year’s third quarter experienced an all time high. It could certainly be the economy that has led to higher incidents of fraud. It could also be increased knowledge of fraud and the knowledge of the importance of reporting fraud via an organizational hotline.
A third party hotline has become acknowledged as a best practice throughout industry and the media. The CFO.com periodical has repeatedly listed a hotline as a key practice in reducing fraud. On December 7, Ken Springer’s article “Lessons Learned from the Frauds of 2011” appeared in the CFO.com publication with tips on how to reduce fraud. One of the five tips is to install a hotline.
In a CFO.com article in November (Sarah Johnson’s November 16 “A Fraud Prevention Tip” article), Greg Bangs, with Chubb Insurance, indicates there has been an “uptick” in fraud related incidents being reported to insurance companies. This article also suggests that executives should consider implementing a hotline to reduce fraud.
Some organizations consider implementing a hotline internally instead of going to a third party to initially save money. This approach leads management to trip over dollars picking up pennies. In reality, a third party hotline does not cost much and the return is much greater since employees are more likely to use it. Employees are less likely to use an internal hotline, as they may not trust its anonymity.