Fraud
attacks over the internet are increasing these days. Fraudsters are becoming
more sophisticated both in their techniques and their tools. Fraud loss
continues to impact every enterprise, in spite of significant advances in fraud
detection technologies.
These days business /consumers both look upon internet and other forms of the electronic communication to reach out the mass globally, but the quirk of fate is that the very same media is used by the fraudsters for the criminal activities funded by the deceptive gains.
Some of the famous fraud examples are:
Most of us have received an Email outlining a situation in Nigeria that calls for desperate cry for a huge money transfer to another safe account outside the country. The recipient of the email is promised thousands of dollars for such unskilled help.
Another interesting scam is lottery scam where you receive intriguing emails of winning the lottery of the amount most of us must have only dreamt of. The list is never ending and ever growing. The scammers put together storylines that appeal human emotions and take away your contact information or, even worse, your bank account information. These scams, like most of the scams, are too good to be true and people fall for this money transfer con game. Fraud is an increasing problem with fraud perpetrators becoming more sophisticated and complicated both in their techniques and their tools.
Steps to manage fraud are:
Fraud prevention: includes the enforcement of strict policies, procedures, access and usage controls to ensure that fraud does not take place. Fraud Prevention techniques do not ensure fraud will not take place but are the first line of defense in reducing the fraud risk and promoting awareness about the fraud that may occur.
Fraud detection: includes activities and actions that identify and locate fraud prior to, during, and subsequent to the completion of the fraudulent activity.
Fraud reduction: fraud free security is practically impossible but frauds can be reduced to some extent.
Preventive controls and detective controls integrated together can improve the effectiveness and increase the efficiency in managing the fraud. Every organization is vulnerable to fraud, but not all fraud can be prevented. It is imperative for organizations to consider both fraud prevention and fraud detection for effective fraud prevention.
Managing fraud is a fragmentary balancing act where companies continuously think about strategies and prevention techniques to overcome fraud loss. Identifying known and existing risk is the initial step of prevention. Organization can perform gap analysis and prioritize activities that enable companies protect companies’ assets, corporate values, and performances. By reducing fraud, a company can trim costs and improve profitability, and contribute greatly to the organization. Antifraud controls are requisite by law, and fraud risk assessments are the foundation stone of an effective antifraud effort. They provide an excellent means for internal audit to provide significant organizational value and gain a higher profile with the audit committee and senior management.
Mohini Bhandari is a consultant in Systems Plus Pvt. Ltd. Within Systems Plus, she actively contributes to the areas of Technology and Information Security. She can be contacted at mohini.b@spluspl.com
These days business /consumers both look upon internet and other forms of the electronic communication to reach out the mass globally, but the quirk of fate is that the very same media is used by the fraudsters for the criminal activities funded by the deceptive gains.
Some of the famous fraud examples are:
Most of us have received an Email outlining a situation in Nigeria that calls for desperate cry for a huge money transfer to another safe account outside the country. The recipient of the email is promised thousands of dollars for such unskilled help.
Another interesting scam is lottery scam where you receive intriguing emails of winning the lottery of the amount most of us must have only dreamt of. The list is never ending and ever growing. The scammers put together storylines that appeal human emotions and take away your contact information or, even worse, your bank account information. These scams, like most of the scams, are too good to be true and people fall for this money transfer con game. Fraud is an increasing problem with fraud perpetrators becoming more sophisticated and complicated both in their techniques and their tools.
Steps to manage fraud are:
Fraud prevention: includes the enforcement of strict policies, procedures, access and usage controls to ensure that fraud does not take place. Fraud Prevention techniques do not ensure fraud will not take place but are the first line of defense in reducing the fraud risk and promoting awareness about the fraud that may occur.
Fraud detection: includes activities and actions that identify and locate fraud prior to, during, and subsequent to the completion of the fraudulent activity.
Fraud reduction: fraud free security is practically impossible but frauds can be reduced to some extent.
Preventive controls and detective controls integrated together can improve the effectiveness and increase the efficiency in managing the fraud. Every organization is vulnerable to fraud, but not all fraud can be prevented. It is imperative for organizations to consider both fraud prevention and fraud detection for effective fraud prevention.
Managing fraud is a fragmentary balancing act where companies continuously think about strategies and prevention techniques to overcome fraud loss. Identifying known and existing risk is the initial step of prevention. Organization can perform gap analysis and prioritize activities that enable companies protect companies’ assets, corporate values, and performances. By reducing fraud, a company can trim costs and improve profitability, and contribute greatly to the organization. Antifraud controls are requisite by law, and fraud risk assessments are the foundation stone of an effective antifraud effort. They provide an excellent means for internal audit to provide significant organizational value and gain a higher profile with the audit committee and senior management.
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