This article is about Technology

Fraud prevention in companies: everything you need to know


Published at
13 de October de 2022

See how to prevent fraud and other cyber crimes.

Regardless of the organisation's size or the niche in which it operates, being aware of fraud prevention policies is essential for the company to remain safe in the market.

However, most organisations do not approach this issue holistically, leaving the company more susceptible to attacks. A well-thought-out fraud prevention strategy must involve all company layers to address any vulnerability points, as criminals are increasingly agile in identifying these points.

The growing sophistication of fraudulent crimes and the increase in cyber crimes become a consequence within the corporate world as long as companies do not implement adequate prevention policies to minimise possible deviations and all the problems that these crimes cause.

What is fraud prevention?

Fraud prevention can be understood as a concept that addresses a series of practices ranging from communication, procedures, and training to implementing internal and external policies to minimise the risks of fraud within the company.

Although eliminating all the risks that may arise seems like a difficult task, thinking strategically about this set of actions avoids a series of consequences and future problems. Preventing, identifying and monitoring the actions of all employees in the face of adopted policies is essential and requires a continuous effort from the entire organisation.

Next, we'll talk about the types of fraud and what best practices an organisation should follow to protect itself. Is your company really safe? Check out!

What are the existing types of fraud?

There are different ways scammers can take action. Concerning victims, these can be either an individual (citizens) or legal entities (companies). In the case of individuals, the most common are:

Credit card fraud

In this case, and despite this type of scam being applied to individuals, companies must also keep an eye out for suspicious transactions. After all, it is always prudent to avoid fraud, even if these inconveniences do not cause direct financial losses to the business.

Registration fraud

This type of fraud can cause severe damage to companies, as it occurs when criminals use victims' data for operations such as loans or financing. It is also important to point out that, in this case, the company runs the risk of having its confidence shaken before the market and consumers in general, tarnishing the name and status of the company. Therefore, it is of paramount importance that companies that manage consumer data have validation and security policies, which we will talk about later in this article.

On the other hand, concerning companies, there are two most common types of fraud:

Occupational Fraud (or internal fraud)

As the name suggests, internal fraud is carried out by a company member, who may be an employee or even a partner. The most common types in this case are:

Launching undue payments;

Forgery of invoices;

Reporting fraud;


Embezzlement of money;

Sharing privileged information;

Corruptions in general.

External fraud

External fraud is characterised when a third party from outside the company practices some illicit act that will directly harm the establishment in question. This act can be committed by suppliers, partners or service providers, customers, etc. Examples of these acts include:

Falsification of documents;

Omit information;

"Stooges" or ghost suppliers;

Data theft (access, passwords).

Cressey's Triangle

When this type of risk is not foreseen in the company's strategic planning, the consequences of these actions range from minimal to catastrophic, leading the organisation to bankruptcy. The lack of oversight creates the perfect territory for fraud to occur more easily and more likely to cause damage to the business.

To better understand this scenario, in 1953, a study was carried out to analyse fraudulent behaviour within organisations. The study found that the main reason for this type of occupational fraud is when the employee believes he can solve his financial problems through the company's resources.

The Cressey Triangle (fraud triangle) identified three main factors in this type of situation:


An opportunity occurs precisely when the possibility arises of committing fraud without getting caught. An open box, with some cash in sight and no one around, for example, is an opportunity that many see to benefit at the expense of this "opportunity" for fraud.


If the employee arrives at this stage without committing the illicit act at the moment of opportunity, this is where he rationalises the possible advantages and disadvantages of committing fraud.

Pressure (or Incentive)

Finally, this stage of the fraudulent process is where the employee justifies himself and the reasons for committing the illicit act. Motivations are subjective and can be family, personal or professional.

Cressey's study proves extremely useful when organisations develop an action strategy to prevent or contain fraudulent acts.

Why invest in fraud prevention?

Investing in good fraud prevention planning is critical to keeping your business safe and preventing further damage to your organisation.

Financial loss is just a consequence that the company may be subject to if there is no assertive and effective action plan against such actions.

The chargeback, or chargeback, is an example of a common loss among companies. That could be easily avoided if there were more security in cases where some illicit act causes the loss.

In addition, the company's reputation is also corrupted, as it signals that it is not mature or even prepared to act in risky situations.

A drop in company shares, loss of market value and even more severe sanctions from investors are indirect consequences that many organisations neglect when they are not adequately prepared.

The study, "PwC's Global Economic Crime and Fraud Survey 2020 – Fighting fraud: A never-ending battle", surveyed more than 5,000 professionals in 99 different countries about their experiences with fraudulent cases and found that 47% of these professionals said they had experienced any situation involving fraud in the last 24 months.

According to the IBGE, the national statistics are also worrying: 69% of Brazilian companies have identified fraud in recent years.

Despite the high number, 70% of organisations already adopt practices for preventing and investigating corporate fraud, according to the survey "Surveillance against fraud in Brazil – Structures for combating and handling incidents" by Deloitte.

With the advancement of technology, fraudulent schemes are increasingly silent and sophisticated, increasing organisations' exposure to risk. Therefore, monitoring and prevention actions must be periodically reviewed and updated.

How to prevent fraud in your company

Below, we have brought a series of actions that can be implemented to help prevent and combat fraudulent acts:

1) Be aware of all processes, especially financial ones. Knowing your company is essential to avoid risks. Ensure you understand and follow all the processes that mainly involve financial movement.

2) Recruit a reliable team with good precedents. Especially for companies in the financial sector, hiring reliable professionals is essential. Always look for good references when hiring your employees.

3) Understand the software chosen for the financial management of your company: Knowing your company's financial management software is essential to avoid breaches by malicious people. With the necessary knowledge, exposure to risk decreases dramatically, and so do the chances of fraud.

4) Periodically keep track of all reports Periodically monitoring your company's financial reports is a simple way to ensure the transparency of financial processes and transactions.

5) Make use of technology. Although technological advances have led to the emergence of new forms of fraudulent acts, the use of technology can - and should - be an essential ally in the fight and prevention of illicit acts of any kind.

6) Check the histories and references of partners and suppliers. Looking for good references before closing with a partner and supplier is usually not very costly, but it can save you a lot of future losses if the practice is not carried out.

7) Develop, communicate and enforce codes of ethics and conduct in your organisation. Developing a code of ethics and applying it when necessary shows that you don't overlook risks and are ready to manage them. Communicating this code to the company (and outside it) is enough to create a warning sign for the bad guys.

8) Validate personal information. Regarding data protection, having a system to check the customer profile and personal information will prevent this data from being cloned or stolen, avoiding many future headaches.

9) Manage the risks A risk management plan is essential to prepare for any unforeseen action that may occur within your company, especially when preventing fraud and illegal acts.

10) Invest in anti-fraud solutions. Several anti-fraud tools available on the market will help your company protect systems, ensuring the security of processes and operations performed.

11) THave a compliance program A compliance system is an excellent way to obtain greater internal control and provide a safer territory for your employees, partners, and the company.

An Anti-Corruption Compliance program is ideal for curbing corruption-related actions to be even more assertive.

Now that you have checked everything you need to know to prevent your company from fraudulent actions, learn about our cybersecurity services and ensure that your company is 100% safe in the digital environment!

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