Richard James Schueler (How Scam Can Affect a Business)

1. Richard James Schueler Richard James Schueler on on How Scam Can Affect a Business How Scam Can Affect a Business Serious scams can occur in several ways for a business. Whether it is a scam within your business from the upper levels, fraud from an employee, or external fraud, the effects on a company can be overwhelming. Before people dive into how scams can have a vast impact on a business, it is important you understand the number of ways business fraud can take place. Here’s a shortlist to give you a deeper insight: Insurance fraud: A company might file false or exaggerated claims for an insurable event, e.g. a fire in the business building External fraud: Companies can be the victim of external sources of fraud through spam emails, cybercriminals, and the like Billing fraud: Similar to above, but is based on the false reporting of expenses in the hope of financial gain Tax fraud: Deceptive reporting of income to reduce tax liabilities Accounting fraud: False reporting of income, profits, and expenses to deceive investors Identity fraud: Assuming a business's identity to utilize their financial resources illegally Richard James Schueler says that fraud scams occur both at an external level and an internal level. Whether it is an external source manipulating the business or someone within the business manipulating the books, there are a number of potential outlets. Either way, the effects on a business can be overwhelming. Here’s how: Fraud can be a traumatic experience for clients and can have irreparable impacts on the client’s mental health and their life. Due to this, even after the entire situation blows over, it is likely that those involved with your business will be far less confident in dealing with you.

2. Businesses may feel concerned about being associated with you, and the effect this may have on their brand image. What’s more, individuals may be concerned about the impact continued dealings with you will have on their family, careers, and mental health. Hence, it is likely that they will find a new business to deal with for the services you offered them. The lack of repeat and new customers after a fraud allegation will have a vast financial impact on your business. But, that is not the only way this can have an impact. In fact, international estimates show that public bodies can lose between 0.5 and 5% of their budget to losses from fraud. For starters, the legal fees incurred to support your business after a fraud allegation can be vast. This, of course, depends on the nature of the fraudulent activity, and whether it was internal or external. It also depends on how many people, including employees, clients, and customers were involved. On top of this, a business will have to put strict measures in place to avoid this happening again, whether that is hiring new talent to deal with accounts and systems properly, or putting new processes and checks in place to avoid this. Certain scams especially external cases can involve monetary fines from the ICO, or even ransoms having to be paid. Ultimately, the financial losses are untold and affect businesses in a variety of different ways. Similarly, it is unlikely that new customers will feel safe seeking your services if you have been involved in a fraud allegation. They may be concerned about being linked with you, as well as having concerns over whether their information is safe with you. This is likely to limit the influx of new customers in the future. Morale in the company can be affected in several ways. For example, employees may feel guilty for not detecting fraudulent activity, affecting their confidence in their abilities. This can have a knock-on impact on employee productivity. If the fraud came from high up in the company, employees will likely feel a lack of trust in their superiors. Ultimately, it is unlikely to be positive for any of the employees at present working there. Richard James Schueler says that avoiding fraudulent actions at all costs is important. Having the correct processes, training, and systems in place to avoid external fraud is vital. What’s more, keeping an eye on accounts and employee activity to avoid internal fraud is a superior place to start.