Hotlines Continue to Be the Best Mechanism for Reducing Fraud
The 2022 Association of Certified Fraud Examiners Report to the Nation is officially out. And there is a lot to unpack. The data and metrics continue to support the viability of ethics hotlines, demonstrating to company leaders that hotlines may just be the best line of defense against fraud. As Ethical Advocate just surpassed the 5.5 million people mark of those currently contracted to use our whistleblower services, it’s also a good time to share some of the details behind the latest ACFE Report.
Fraud-Related Stats, According to the ACFE
It’s been proven, especially among those companies already using ethics hotlines, that hotlines themselves work as a method of fraud prevention. Only now, the ACFE reporting reinforces it even more. According to the Report, the average business or organization loses 5% of revenue to fraudulent activities. In reviewing cases of fraud, the ACFE estimates further that ethics hotlines reduce the cost of fraud by half and will improve the length of time to discover by 35%. And based on these metrics, ethics hotlines are more effective in reducing fraud than any other detection or prevention solution.
Fraud Detection Is Key
Regardless of your company offering or niche, fraud can happen anywhere. Establishing an ethics hotline provides a safe, secure, and anonymous method of reporting. When employees encounter questionable behavior, they can submit a report, allowing your company to perform necessary investigations. It’s this early detection that can translate to reduced lost revenue. Additionally, the data and metrics collected as part of your ethics hotline solution can help your internal teams stay ahead of policy enforcement.
The ROI of Hotlines
More than half of all tips regarding fraudulent activities come from employees. And the ACFE Report to the Nation also pointed to hotlines representing 42% of the fraud tips. Additionally, organizations with hotlines in place are able to detect fraud more quickly, saving thousands. Medium losses were measured to be $100,000 to those companies with hotlines versus the $200,000 lost among companies without ethics hotlines.
Industries Reaping the ROI Benefits of Ethics Hotlines
Ethical Advocate works with countless companies across a wide variety of industry segments. Fraud and unethical activity can present in education, for example, including in K-12 schools and university environments. We work with government entities and municipalities as well as those in the non-profit sectors. Public and private businesses alike all face potential setbacks and compliance violations. Ethics hotlines continue to be the most effective tool in your arsenal for combatting these instances in restaurants, stores, among service industries, and manufacturing. Healthcare, financial services, construction, and others can all reap the ROI benefits of a properly maintained ethics hotline.
Ethics hotlines are instrumental in reporting other instances of malfeasance, as well. Stay on top of safety compliance and human resources engagements. Prevent and respond quickly to harassment, discrimination, and theft. Identify vulnerability within your organization and adapt your policies to reinforce a positive work culture. And let Ethical Advocate be your guide in developing and managing your ethics hotline strategies so you can start seeing immediate ROI.