KYC

We are now able to offer a brand new product aimed at our Clients who do business with small and medium size companies.

Up to now the only way to check the financial probity of your new customers was a laborious, time consuming and costly search through various databases.

Not anymore!

We have developed a report that gathers together information relating to County Court Judgments, Insolvency, Credit Rating scores, the Electoral Roll and much more.

The information is analysed and personal and commercial data is combined to give you the most up to date risk assessment of your potential new customer.

Very often your financial exposure is only a few thousand pounds, but this new report significantly reduces your risk and at a very competitive price, and importantly within 24 hours of you supplying us with basic information.

Contact Paul Wiseman on 01691 655732 for more information and take the first step to reducing your risk.

FRAUD COSTS THE COUNTRY £85.3 BILLION A YEAR

The UK is losing some £85.3 billion to fraud every year according to the latest “Financial Cost of Fraud

Report 2013” from BDO LLP, the accountancy and business advisory firm.

The good news is that some companies have reduced their fraud losses by up to 40% within 12 months.

How?

• By introducing robust anti-fraud cultures.

• Introducing meaningful deterrents.

• By regular fraud risk assessments to identify and remove system weaknesses.

• By regular anti-fraud training of all employees.

A 40% decrease in fraud represents approximately £34 billion or the equivalent of the 2012 UK education budget.

If you really want to reduce your fraud losses and put the money where it belongs, on your “bottom Line” call Paul Wiseman Investigations for a free consultation.

REMEMBER, IT IS CHEAPER TO PREVENT FRAUD THAN TO INVESTIGATE IT.

EX BANK MANAGER CONVICTED OF THEFT

Graham Peter Barnett was an ex-Nat West bank manager and a respected member of the community in Oswestry, Shropshire: he was also a thief, and on Thursday 7th March 2013 he was finally convicted.

He was not your ordinary run-of-the-mill thief; he was something special, a man who didn’t care who he stole from; employer, family or close friends and acquaintances, he didn’t care; to him they were just targets to prey upon; just another income source.

Graham Peter Barnett, known locally as Peter Barnett was the treasurer of Cae Glas Cricket Club for 30 years – He stole from them; they were a small club that relied in the main for their income on sponsorships and club members subscriptions. He controlled the club finances, and systematically skimmed money from them. He even had the temerity to rebuke them for not bringing enough money into the club. He not only stole from club members, but also from many sponsors who supported the club.

He worked for a small local bakery that was owned by his first cousin from whom he had begged for a job. He started stealing from the bakery almost from his first day of employment, quickly ingratiating himself with the owner until he was doing all of the invoicing and banking – soon he was helping himself. His employer and I gave him the nickname of Mr 30%, because 30% was what he skimmed from the business, and when the price of bread went up, so did his 30%.

Peter Barnett worked at the bakery from February 2008 until April 2011 when we turned off his income source. It has taken almost two years to get a conviction in Shrewsbury Crown Court because Peter Barnett denied responsibility until the bitter end, despite overwhelming evidence to the contrary, and despite putting his victims and the witnesses to his crimes through an emotional and stressful period of misery.

Before gaining employment at the bakery, Peter Barnett worked as an administrator at an old people’s nursing home. He also spent time as the treasurer of the local Conservative club, in fact because of his standing in the community, he was at one time or another the treasurer of quite a few small organisations.

He and his wife took at least four holidays a year, a luxury two week cruise being his final holiday before we caught him.

He managed to get away with his crimes for so long because he was respected, an ex bank manager, and also because he selected his victims with great care, in environments where he exercised full control over the finances.

Peter Barnett is 67 years old and I think he has been a thief for a long time, unfortunately many of his victims may be dead or unaware that they were victims.

Peter Barnett has yet to be sentenced; I hope that he goes to prison for a long time.

Why my employees won’t steal from me: 5 myths – ACFE Report

The statistics are staggering. The latest National Retail Security Survey states that 45 percent of losses to retailers are attributed to theft by employees. The Association of Certified Fraud Examiners (ACFE) reports that 5 percent of revenues of a typical organization are stolen by company workers. The average internal fraud scheme goes undetected for 18 months. Small businesses are particularly vulnerable since they don’t have the resources or the processes in place to avoid and/or detect fraud activity.
With no formal loss prevention programs in place, many owners and managers rely on their experience and expertise to react to incidences of employees stealing. Others rely on their beliefs, perceptions and ideals that their employees would not steal from them for a number of reasons. The following are myths associated with those ideological thoughts:
My employees would not steal from me because …
1. They Like Me – While it is true that good relationships with the boss may deter a small percentage of employees from stealing, research has shown that dishonest employees are driven by a number of factors. Loss Prevention professionals cite the presence of the Theft Triangle as the breeding ground for employee theft. When these elements are present in the workplace, employees may be tempted to steal or become involved in other counterproductive behaviours.
Theft Triangle
• Motive – Potential gain and use for the cash or product
• Opportunity – Ability to quickly and safely steal the cash or product
• Low Risk of Detection – Perception of low probability of getting caught
The employees may genuinely like the manager or owner, but if the three factors are present in the work environment, the temptation to steal may override friendship.
2. They’re My Best Employees – Many managers and employers perceive that because certain employees are self-motivated, hard workers, they do not have any integrity issues. They are above reproach simply because they exceed expectations in their performance. And because of that belief, those employees are not scrutinized for compliance to the rules, nor suspected of counterproductive behaviour or theft. Without accountability to the rules, even the best of employees may take advantage and steal.
3. I Show That I Trust Them – It is essential that trust be developed throughout any organization. It is the foundation of every great relationship. In the world of business, the trust must be validated with accountability. Unfortunately managers and owners may interpret showing trust as not checking up on employees. Without a check and balance process or audit system, employees may perceive that there is low risk of getting caught. All incidences of employee theft violate trust. Show your employees that you trust them, but follow up on the performance expectations you have established.
4. They Have a Clean Background – Pre-employment background checks are significant in establishing a comprehensive loss prevention program. Hiring employees without criminal convictions may be a good start in creating an environment of honesty and trust. High integrity must permeate the organization. With a culture devoid of strong policies and procedures supported by compliance processes and effective supervision, employees may steal with a compelling motive, opportunity and the perception that they won’t get caught. The ACFE reports that of the 1,388 internal frauds investigated by Certified Fraud Examiners in the past year, 87 percent of them were perpetuated by first time offenders. They cited the lack of internal controls as the key factor in the crimes that triggered the criminal behaviour.
5. I Pay Them a Higher Wage – Assumptions are made that paying employees a higher wage than their counterparts with other companies will make them happy. If employees are happy with their wages they won’t steal. It’s another myth. Sociological studies have shown that employees are influenced by the culture established by the work environment. Approximately 10 percent of the employees are morally incorruptible. They don’t bend or break the rules. They don’t steal given any opportunity to do so. Additionally, approximately 10 percent of employees bend and break policies and procedures with regularity and are prone to steal. They are the challenge of Human Resource personnel in medium and larger size businesses and a big problem for the smaller companies. The remaining 80 percent of the employee’s behaviour in the workplace is influenced by the culture and attitudes. If the rules are clear and compliance is expected, employee behaviour gravitates to following those rules. If the counterproductive behaviour of the small percentage of the problem employees is not addressed and allowed to flourish, other employees will be influenced by that behaviour. Ninety percent of the workforce can be positively influenced to compliant behaviour with well written rules, clear expectations and effective follow-up.
We want to believe that employees won’t steal from us. We really do. We use these reasons to support our views. But, on their merits, these views are indeed myths. Sociological studies on workplace behaviour, criminal investigations on employee fraud, and anecdotal stories have proven that the workplace environment must be controlled to avoid counterproductive behaviour and theft. Policies and procedures must be well written. Compliance to the rules and behaviour expectations must be clear. Internal controls must be established and audited. Counterproductive behaviour must be addressed effectively, and the elements of the Theft Triangle must be eliminated. It must be known in the work environment that opportunities to steal are low and the probability of getting caught is high. You then might be right when you say; my employees won’t steal from me.

INVESTIGATING FRAUD IN YOUR BUSINESS

If you suspect that one of your employees is a thief; what do you do? If you decide to investigate yourself, there are risks to consider.

Badly conducted investigations can damage vital evidence, the reputation of the organisation and staff morale.

Some of the key risks associated with fraud investigations include (but are not limited to):

• Reticence to punish employees or investigate them for internal fraud, preferring to permit their ‘quiet’ resignation so as to avoid negative publicity (for fear of reputational damage, public perception, etc)

• Unqualified staff attempting to conduct investigations and compromising evidence (which ultimately means a case will not be prosecuted via the criminal justice system)

• Failure to comply with relevant legislation resulting in evidence becoming inadmissible in court

• Failing to establish contacts and credibility with law enforcement

• Assuming the police will investigate the fraud once it has been reported to them – or expecting them to conduct the whole investigation on behalf of the organisation.

To find out more contact Paul Wiseman on 01691 655732 or 07855691043.

Initial consultations are FREE.

LANDLORDS – VET YOUR TENANTS BEFORE GIVING THEM A TENANCY

The reason for becoming a landlord may be quite obvious – to generate an income from the rent paid by a tenant – This rent provides that income, and in some cases also helps to pay a mortgage on the property.

However, if that rental income is sporadic or disrupted, the landlord can have a massive headache; at best the tenant will leave without paying off their arrears, or at worst, stay; not pay any rent, damage the property and force the landlord to resort to court action to get them out. The loss in rental income alone can run into 1000’s of pounds, the cost of court action to evict the rogue tenant, and the cost of repairing the inevitable damage to the property just adds to the landlord’s losses.

So it is vital that landlords identify a high risk tenant before giving them a lease, and you start this very important aspect of the process by:
• Formulating a tenant application form that gathers as much information as possible from the prospective tenant. Information such as names addresses and contact details of previous landlords, employer’s details and tenant’s salary. Work on the principle that you may want to trace this tenant in the future. Most importantly obtain the written permission of the applicant to perform a credit check on them. (Vital to compliantly access the tenant’s credit record, or if you need to trace them through their credit record in the future)
• Check previous rental history; if possible contact a previous landlord other than their current one. (It is not unknown for a current landlord to give a glowing report just to get rid of their tenant)
• Insist on copies of photo ID, passport or driving license.
• Insist on having copies of an applicant’s bank statements for the previous 6 months.
Once you have all of this information, you can then make an informed decision on whether to enter into a lease agreement with the applicant.

You also now have a file of information that you can go to in the event of things going wrong, a file of information that can make it relatively easy if you need to find a tenant. Hopefully you will never need this file.

Most tenants are honest and simply want a place to call home; they will pay their rent and not cause you any problems. There are a few who will cause you problems, and this is your way of telling “rogue” tenants that you are not an “easy touch”.

If you have this information obtaining county court judgements and attachment of earnings etc. is much easier.

Paul Wiseman is an investigator with over 10 years experience in private investigation; he has several clients of long standing for whom he performs tenant vetting. Due to his expertise and diligence, his client’s have only experienced ONE rent default in the last 3 years.

Employee Fraud Prevention

The National Fraud Authority has released its latest estimate of the cost of fraud to the UK economy. In 2009 it was estimated fraud cost £31bn. In 2010 that figure had increased to £38bn. In 2011 it is estimated as £73 billion.

These estimates were based on recorded instances of fraud, such as cases reported to the police or a regulator. It does not account for those unreported cases dealt with internally within a business who for reasons of reputation or loss of public confidence would not want an issue of employee fraud to be linked to them publically.

It would be fair to say that a number of the unreported cases relate to instances of employee fraud. Internal abuse of trust either for personal gain or to assist third parties can cause dismay to a business be it the impact on the balance sheet or to staff morale.

Employee fraud can present itself in different guises. Examples include:

• False inflation of performance of a business to create a bonus pool or preserve a job.
• The diverting of monies or goods away from a business for personal gain.
• Information theft, for example customer lists, price strategy or intelligence.
• Expenses claims.
• Collusion with third parties involved in tendering for work.

If employee fraud is discovered, often businesses do not know where to turn first. The police, their accountants or their lawyers? Then there is the cost of dealing with the fraud, either through reputational damage or the cost of recovery through legal proceedings.

It soon becomes clear that the cost of dealing with prevention is far better than the cost of dealing with the reaction to employee fraud. It is also important to note that employee fraud is not always a result of greed.

Why employees commit fraud?
A recent report by the FSA revealed that a number of junior employees in financial institutions did not understand what actions could be considered as fraudulent. This suggests that employees in those organisations are not well educated as to their ethical obligations.

If guidance is in place so that employees are aware of the rights and wrongs and they have training on spotting the signs of fraud, why does employee fraud still occur?

There is a misconception that it is simply a matter of greed but that is not typically the case.

It can start with pressure. It could be the pressure on the employee at home in terms of the cost of living or university fees for children. It could be the pressure to preserve a job. This pressure then leads to finding an opportunity which will depend on an individual’s role in the business. It is interesting to note that of employee fraud cases reported in 2010, almost one fifth were committed by senior members. It is easy to understand why this is the case, in that it would be hard to challenge senior members of staff and they have greater authority with the company finances.

Once an opportunity is found, employees will typically rationalise the situation. This may simply be that they have to do this to ensure all will be in order at home financially. It may be that they believe they deserve more remuneration from the employer.

Once the fraud starts, in many cases it continues for a lengthy period of time until it is spotted. It is this longevity that is linked with greed. Where the need for the fraudulent gains do no longer exist but the opportunity is too hard to resist.

So what can a business do to help reduce their exposure to the risk of employee fraud?

Prevention

Policies
Employees need to understand their ethical obligations. The employee’s contract or the employee handbook has to contain unequivocal statements that any act of fraud shall be dealt with seriously and may potentially lead to dismissal.

A code of ethics could be produced to provide examples of the behaviour that would not be acceptable, for example bribery or corruption in line with a Bribery Act policy, the organisation’s position on receipt of gifts from suppliers, information security, use of emails and the internet and of course theft.

Where feasible, introduction of polices should be coupled with training.

Know your staff
It has been reported that the number of candidate’s CVs contained false or embellished information was almost 20 per cent.

Effective pre-employment screening to include CRB and credit checks may identify a potential rogue employee. Other simple processes such as making a telephone call to a referee as well as sending a letter requesting a reference. There have been cases where referees are fictional.

Look at implementing appraisals that allow you to learn more about your staff as those issues of pressure or fraud indicators may come to the surface, for example through a 360 degree appraisal.

Zero tolerance culture
Seek to create a zero tolerance culture in the business from board level down.
Spell out that all acts of dishonesty will not be tolerated and will be dealt with firmly and consistently so to build towards a zero tolerance culture. Even minor expenses fiddles should be addressed to encourage ethical conduct.
Whistle blowing policy
Ensure you have an effective whistle blowing policy in place.

A voice needs to be encouraged amongst the staff to report concerns. Anonymity can be preserved for staff and there should be no disclosure of staff who report matters which subsequently lead to no finding of fraudulent activity.

Fraud prevention plan
Create a fraud risk management plan which deals with prevention, detection and response.

All businesses are vulnerable to fraud but that risk varies according to the nature and size of the business and sector in which it operates. Understanding the risk profile of your business is one of the first steps in successfully managing fraud.

Fraud response plan
Have an effective fraud response plan.

A fraud response plan outlines the policies and procedures that a business will follow in the event of fraud being discovered or suspected. A good fraud response plan should aim to outline the entire fraud investigation covering, for instance, who to contact, when and how to act upon the receipt of the initial allegation, through to the final internal report process.

It must demonstrate the organisation’s commitment to a zero tolerance culture and ensure that all staff are fully aware through their staff handbook or otherwise as to how the business responds to an issue of fraud.

Conclusion
As the economy shows little signs in terms of recovery, individuals in certain circumstances who would never have considered deceitful behaviour, may find themselves crossing that line.

Employee fraud will never be completely removed as a threat to businesses, however implementing effective obstacles and deterrents will ensure that prevention remains a far more attractive approach than having to find a cure.

Tips from Land Registry to combat fraud

The Land Registry has released some tips to help owners protect their property from fraudsters
Property is an attractive target to fraudsters because it can be sold and mortgaged to raise money. Properties most at risk are usually empty tenanted or mortgage-free.

The individuals highlighted as a higher risk of fraud include;
• Owners who are absent.
• Buy to let landlords.
• Owners living abroad.
• The elderly not living in their properties for reasons such as long term hospital or residential care.

The Land Registry’s top tips to help owners protect their property from fraudsters are:
• If you make sure your property is registered you will be compensated for financial loss if you do fall victim to fraud.
• Once registered keep your contact information up to date so you can be easily contacted if a complication arises.
• You can have up to three addresses on the register; email addresses or an address abroad can be used. The more information you provide the more chance the Land Registry has of reaching you.
• You can have a restriction entered on your property if you feel it might be at risk. A restriction is designed to help prevent forgery by requiring a solicitor or conveyancer to certify they are satisfied that the person selling or mortgaging the property is the true owner.

From the 1 February 2012, there is no Land Registry fee for home owners to register this restriction, as long as they do not live in the property they wish to protect. Owner occupiers will continue to pay a small fee.

Malcolm Dawson, Chief Land Registrar said:
“Today’s launch of our ‘Top Tips’ shows how important it is to let home owners know what simple steps they can take to protect their property – one of which is now the ability for those at greatest risk to have a free restriction entered which might prevent their property from being targeted by fraudsters and stolen unawares.

“We have introduced a range of additional safeguards in the last four years and we also work closely with other organisations to do all we can to tackle fraud and identify and take corrective action when it has happened. But home owners must also be vigilant and play their own part in protecting their properties against fraud.”

FRAUD – SMALL AND MEDIUM SIZED COMPANIES

Workplace fraud is costing small and medium sized business billions of pounds a year. It not only jeopardises the financial stability of the victim companies; it can also have a devastating effect on employee morale, leading to lower productivity and higher employee turnover.
It is estimated that approximately 75% of crimes against companies, such as theft, fraud and assaults either go unnoticed or are not reported.
A small or medium sized company is 15 times more likely to have an employee steal from them than a non-employee. The impact both financial and nonfinancial is huge, and the problem is going to get worse as economic growth slows and employees experience more acute financial difficulties through loss of overtime and short time working.
The most common types of fraud are theft of cash, inventory and assets, and the perpetrators have three things in common – they are under some form of PRESSURE, they can JUSTIFY what they are doing and they have the OPPORTUNITY to commit the fraud.
They can be of either gender, of any age and their length of service can be from 1 day to 40 years; in other they do not walk around with a sign on their forehead saying “I am a fraudster”. Fraud is not a “one off” opportunist crime; the fraudster needs to keep on doing it, and consequently will spend as much energy in hiding their crime as doing it.
Apart from the financial implications of their crime, they have a dramatic effect on staff morale and management confidence; with the reputation, value and public and client trust in the victim company suffering.
It is estimated by the Association of Certificated Fraud Examiners that a conservative annual loss due to fraud by employees is equal to 5% of a company’s turnover; and that is without the value of the environment of stress and mistrust caused when a fraud comes to light.
When a fraud is discovered within a company it can be devastating; with a whole spectrum of emotions from shock, disbelieve, anger and a sense of betrayal adding to the financial implications.
Most employers seem to think they are immune to the fraud “phenomenon” and have no response plan in place, nor do they undertake any form of risk assessment. Hence, when the unthinkable happens they make costly mistakes in dealing with it.
Simple cost effective actions such as pre-employment checks and communicated written policies telling employees what behaviour is acceptable and what is not, will go a long way to reducing a company’s exposure to fraudsters.
Internal controls and systems need to be monitored and effective by controlling who has data access.
A “zero-tolerance policy” must be clearly communicated so that everyone is aware of the consequences when they get caught.
Whistle-blowing hotlines are another effective way to ensure that a company can use every employee’s set of eyes and ears to limit the risk of fraud.
Fraud prevention should be measured as an investment; because the real cost of investigation can be very much higher.
There is no “off the shelf” solution that fits every company; companies need to tailor prevention and detection measures according to their individual needs.
A company cannot eliminate fraud – there will always be a way for bad people to do bad things; but if the risks of fraud can be reduced – it makes good sense; and it makes a positive difference to the “bottom line”.

The Top Scams of 2011

Job scam
E-mails, websites, and online applications can look professional, and the candidate is usually interviewed for the job over the phone. However, when the job “offer” is received, the candidate has to fill out a “credit report” or provide bank information for direct deposit of his or her “pay checks.” The “job” is nothing but a way to capture sensitive personal data that can be used for identity theft.

Sweepstakes and lottery scam
In order to claim the large amount of money you’ve “won,” you have to send someone a smaller amount. This year’s top sweepstakes scam was the e-mail claiming to be from Facebook founder Mark Zuckerberg announcing that the recipient was the winner of $1 million.

Social media scam
With so much information about you online, a scammer can sound like they know you. This year top social media scam sounds like it’s coming from a friend. When you click on the link, you are prompted to “upgrade your Flash player,” but the file you end up downloading contains a worm that logs into your social media account, sends similar messages to your friends, and searches for your personal data.

Home improvement scam
Home improvement contractors who often leave your home worse than they found it. They knock on your door with a story or a deal. Some move in after a natural disaster. Check out any contractor you’re considering using.

Check cashing scam
Two legitimate companies – Craig’s List and Western Union – are used for scams, especially check cashing scams. Someone contacts you via a Craig’s List posting. They send you a check for more than the amount they owe you for the item you’re selling. They ask you to deposit the check into your bank account and then send them the difference via Western Union. When the original check bounces, you’re out the money you wired.

Phishing scam
The worst phishing scam this year disguised itself as a communication from NACHA – the National Automated Clearing House Association – which facilitates the transfer of electronic transactions. The e-mail claims one of your transactions didn’t go through, and it hopes you react quickly and click on the link before thinking it through. It may take you to a fake banking site to “verify” you account information, or it may download malware to infiltrate your computer.

Identity theft scam
In a prevalent hotel scam, you get a call in your hotel room in the middle of the night saying it’s the front desk clerk. They need to get your credit card number again because the hotel computer crashed or they got the number wrong. Scammers are counting on you being too sleepy to catch on that the call isn’t from the hotel, but from someone outside who knows the direct-dial numbers for the guest rooms.

Sales scam
In penny auctions, you pay a small fee for each bid, and if you aren’t the winner, you lose that bid money. Winners often aren’t even the top bidder, just the last bidder when time runs out. Although not all penny auction sites are scams, some are being investigated as online gambling. It is recommended you know how the bidding works, set a limit for yourself, and be prepared to walk away before you go over that limit.

Complaint Against Your Business
The Better Business Bureau phishing scam. Hundreds of thousands of people have received e-mails that look like an official notice from the BBB. The subject line says, “Complaint Against Your Business,” and the instructions tell the recipient to click on a link or open an attachment to get details. If the recipient does either, a virus is launched on their computer that can steal banking information, passwords, and information needed for cyber-theft.