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ACFE Fraud Survey – Importance of Training Programs

According to the recent fraud survey conducted by Association of Certified Fraud Examiners (ACFE), the most effective fraud prevention tactics were “non-accounting controls” such as hotlines and training and support programs for both employees and managers.  The human factor also played a significant role in the discover of fraud.  The most common method of catching a fraudster is a tip-off.  In fact, tips expose fraud three times as often as do management reviews, internal audits, and account reconciliations.

For more information, click here.


New Anti-Harassment Provisions in Manitoba, Canada

Manitoba has followed the lead of other Canadian provinces by introducing new measures to protect against psychological harassment in the workplace, labour and immigration minister Jennifer Howard announced Thursday.  Changes to the Workplace, Safety and Health Regulation will add new requirements to protect workers from all forms of harassment, including intimidation, bullying and humiliation.

“Manitoba now joins other provinces such as Ontario, Saskatchewan and Quebec in requiring employers to provide protection from such harassment,” Howard said in a provincial government release. “This builds on other measures that protect workers from harassment based on age, race or gender and ensure that workplaces are respectful and safe for everyone.”

Employers will be required to put in place measures to prevent such harassment and address it if it occurs. The province will help develop and implement policies and educate workers and employers about their responsibilities to ensure a respectful and healthy workplace.  View article from Winnipeg Free Press here.


On-line Fraud and Information Theft

Two recent studies reflect the growing risks of on-line fruad and thefts of information and electronic data.  In this Financial Times article recapping a recent Kroll study, it states that on-line have become bigger problem for global companies than physical property crimes.  And, this recent report at, shows that approximately 1.6% of on-line transactions are fraudlent.


New FCRA Obligations May Impact Employers

Recently, the Federal Trade Commission determined that certain companies, such as reference-checking providers, are consumer reporting agencies under the Fair Credit Reporting Act (FCRA).  As a result, employers that provide payroll and other employee-related information to certain third parties in connection with outsourced services, such as unemployment processing and reference checking, will be considered “furnishers” within the meaning of the FCRA and, therefore, subject to applicable federal and comparable state law regulations.  Federal regulations that impose new responsibilities on employers that provide consumer credit information to consumer reporting agencies took effect on July 1, 2010.

For a good summary of the new regulations, click here.


Why Employees Don’t Speak Up

There is a good post over at the Harvard Business Review blog about some research conducted on why employees don’t speak up in the workplace.  This research doesn’t focus only on whistle-blowing or fraud scenarios but also on innovative ideas, concerns over marketing strategies, or witholding information that could help shape strategy for the organization.  Potential retribution, lack of personal gain from speaking up, or viewing the effort as futile were all cited as reasons for what the authors call “organizational silence.”

If your employees are unwilling to speak up on business ideas, what are the chances they will speak up when faced with a higher stakes issue such as fraud, policy violations, or harassment issues?  Our experience shows us that it is rarely sufficient to simply post a hotline number on a wall or on a business card and expect that employees will automatically call when they see an issue of theft, fraud, or harassment.  The cited research also suggests that simply having an “open door” policy or a suggestion box is not enough to encourage employees’ input.  An organization and its management must actively cultivate and seek out employee input.

Read the blog post here and let us know if we can help your organization improve its communication in both directions.


National Retail Security Survey – 2009

The final report for the 2009 National Retail Security Survey has been published.  As previewed at this year’s NRF Loss Prevention Conference, the shrink results from this report are tied at an all-time low of 1.44% of sales.  Despite the “sky is falling” mentality reflected in many articles and press releases over the past year and a half, retailers are actually seeing a decrease in shrinakge.  This mirrors what I’ve been hearing from loss prevention executives across the retail spectrum and what I predicted in our NRF panel this year the day before Dr. Hollinger released his preliminary report.

The last three years of this report reflect three lowest shrink figures in the eighteen years of this study.  Maybe it is time we start to celebrate some of the success we are seeing in our industry and take some of the credit?  What do you think?


Mandatory Harassment Training Laws

While there are no federal requirements for mandatory training of employees or supervisors on the issue of sexual harassment, many states have enacted or are considering some type of mandatory training.  For instance, California has one of the strictest laws requiring not only new hire training, but also recurring training.  But, don’t assume that California is the exception as Connecticut and Maine also have mandated requirements for private sector companies and states such as Hawaii, Massachussets, Maryland, Ohio, and others “strongly encourage” such training.

If your organization is not conducting this type of training, there is significant risk of increased liability and sanction should a workplace harassment situation should occur.