Businesses lose money in different ways. One of the underrated reasons is fraud. According to Report to the Nations on Occupational Fraud and Abuse in 2014, a company could lose about 5 percent annually due to fraud. When translated into dollars, the median loss per fraud case is $150,000. Another study from GMI Ratings, which handles corporate governance work, it can be 22 percent of the value of the business. It’s possible fraud wipes out all the investments of the shareholders.
The easiest way for people to commit fraud is to manipulate the books and accounting loopholes. That’s what happened with Enron, a once-popular energy company. With its complex reporting of financial earnings, market-to-market recognition, and SPEs (special purpose entities), it presented itself as a very profitable company to its investors even if many of its subsidiaries were already losing a lot of money.
SIP.US, one of the leading providers of session Internet protocols (SIPs), however, points out there are other types of fraud:
One of the growing business risks of cyberspace theft. It’s so severe it could cost $2 trillion in losses by 2019. For many owners, it usually means cyberspace criminals hacking into poorly designed databases or placing important data or PC hostage, a crime called ransomware.
What many don’t know, though, is a huge percentage of cyberspace crimes happen due to an inside job. Some cases are accidental, such as an employee who unwittingly used a phished website, but more frequently, they are deliberate. Employees may still use information as a form of revenge or for personal gain including selling the data on the black market.
Usually, it involves collusion between the vendor and employee in charge, and any of the party can initiate it. There are different methods to commit it including getting kickbacks for every sale by overpricing costs of goods to creating ghost vendors then channeling payments to the personal account.
More than 90 percent of international calls are unauthorized by the business, which could mean a huge amount of losses since these services are not cheap. Fortunately, the solution for this is easy. It’s called SIP trunking.
In SIP trunking, the provider could track any fraudulent activity and shut the entire service for immediate investigation. The system itself can also record actual calls and save data logs.
Fraud happens whether the business is small or large, and regardless of its severity, it has a moral and financial impact. While one cannot stop it, a business can control it by putting the necessary prevention measures in place.