Employee Fraud in Latin America: One of the Highest Loss Rates in the World
By Russ Warner, Chief Operating Officer
The eyes don’t lie.
Research from the Association of Certified Fraud Examiners (ACFE), indicates that Latin America has one of the highest median losses per case ($250,000) globally for employee fraud. This figure highlights a persistent and high-cost threat posed by internal wrongdoing among employees.
In terms of behavioral red flags, 84 percent of fraudsters exhibited at least one, and the most common was living beyond their financial means.
A critical finding from the research is that over half of occupational frauds are due to a lack of internal anti-fraud controls or a management override of existing ones. The median loss is more than double when controls are not in place ($250,000).
What can be done?
To effectively combat these costly losses, organizations should consider some core foundational anti-fraud measures:
- Implement a whistleblower hotline (the most effective detection method, according to the ACFE).
- Mandate segregation of duties, ensuring no single employee controls an entire financial transaction (from authorization to payment).
- Conduct proactive data monitoring and analysis to identify behavioral red flags, such as sudden changes in spending or unusual transaction patterns.
- Regular, ongoing credibility assessments of employees are one of several solutions that can help reduce employee fraud and theft.
When an employee knows their behavior will be evaluated, they are inclined to change their behavior. This impacts about 80 percent of employees. There will always be a group unaffected by attempts to improve integrity among employees.
EyeDetect and VerifEye are lie detection solutions that can be effectively implemented using internal resources to administer tests. The tests are accurate, non-invasive, and fast. Results are ready in minutes.
Taking action is the most effective way to prevent employee fraud and theft.
The following video is from a former CIA Polygraph Examiner. He discusses the benefits of using EyeDetect to detect deception. https://www.youtube.com/watch?v=8joPFMO3eFY
