Who Needs Fraud Detection Anyway?
Fraud does not discriminate. It will affect everyone, and anyone that has failed to protect their business. You would be surprised for example by the diversity of organizations affected by fraud.
| In the old days fraud detection was a nightmare. It took forever to perform a complex investigation, and you had to know law, business, and finance.
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- Banks, insurance companies, and telephone companies were the pioneers of using data analysis techniques to detect fraud and money laundering;
- Retail Industries suffer from management fraud;
- Your internet transactions put you at great risk; the statistics say that you are 10 times more vulnerable on the internet then in a store doing a transaction.
- Governments and businesses would certainly benefit from credit card fraud detection. They also deal with, insurance claims, cell phones, tax return claims etc.
In 2017 the global losses in card fraud cases reached 22.8 billion dollars, according to a report by Nilson. And just as I mentioned it is only going to get worse before it gets better. Wanna learn the projected loss bill for 2021? 32.96 billion dollars.
Fraud Detection Tips – Focus on Their Body Language
As we mentioned earlier, fraud detection is not an easy task, but if we learn how to recognize the signs of deception, we allow ourselves to spot lies, fraud and identity theft right in front of our eyes.
Of course, no one was born knowing how to spot lies, and this is where a body language expert might come in handy.
In my book How to Spot Lies, Fraud and Identity Theft I offer practical advice that will open your eyes and ears, and show you how to deal with fraud – BEFORE it happens.
By the time you finish this field guide, you’ll be seeing the world with new eyes and hearing with new ears, well on your way to becoming a human lie detector.
One thing is certain, you’ll never experience the world the same way again.
Want to learn more about ‘fraud spotting’? The following video might clear up some burning questions you could have on your quest to discover lies:
Authors note: A little knowledge can be dangerous. As you learn more, be mindful of incriminating someone based on one movement or gesture. Don’t do that!!
The Truth About Lies and Body Language
It takes a lot of thinking and energy to lie. That’s the reason body language can be relied on to indicate deception. Words are the easiest to control, much less so for tone and body language.
Liars not only have to think about the tale they’re telling but, also, have to attempt to generate the appropriate emotions and body language that goes with it. And, they do all this while they’re judging how they’re being received.
They go into cognitive overload when these things that are usually on autopilot, have to be consciously performed. Body language is what usually goes haywire.
One of the most important hot spots to watch for is the timing of someone’s gesture. Do they gesture slightly before they speak or slightly after?
Truthful people gesture just before they speak. Liars gesture just after they start speaking. This is subtle but worth watching for.
Beyond Body Language
Fraud Detection – The Difference Between Staying Safe and Being a Victim
Fraud detection is not a simple task, but it’s one worth undertaking. You truly do not wish to experience that empty feeling in your stomach when you realize you’ve been a victim of fraud.
And if this has already happened to you, you are not alone. And of course, you need to protect yourself with more than body language.
Big cyber crimes require a systematic and automated approach for discovering and preventing fraudulent activities, the experts in this field use data analysis, random forests
and machine learning algorithms.
One of the solutions to deal with fraud, according to experts is using quality database management systems. Wikipedia defines DBMS as ‘an integrated set of computer software that allows users to interact with one or more databases and provides access to all of the data contained in the database.
This means you can easily access, store and retrieve a big amount of information. But for this adaptive malice called fraud, even that effort isn’t enough.
The PwC economic crime survey of 2018 offers some astonishing figures. Almost half of the companies that were surveyed had dealt with fraud of some kind. We’re talking about 3500 companies on a global scale that wish they had a better system for fraud detection.
You need Human AND Technology driven Fraud Prevention.
Cases of fraud are increasing; this is compared to 2016 when 36% of the companies had to deal with financial loss.
Thinking that you’re protected from fraud loss by getting your computer systems protected is not enough. There’s always a human factor. When it comes to fraud detection, the FBI teaches that it’s best to make your decision based on a combination of tools.
It’s important to take all human factors into account — body language, words, tones, even timing—and how they weave themselves together to tell if someone is lying or not.
It’s an art and a science!
The best FBI interrogators have an 80-85% accuracy in lie detection and don’t use opinion. The average person on the street has a 50% accuracy just using gut feeling which means it’s based on opinion.
That’s about as accurate as a coin toss.
My goal for you is to move into the space where you transcend your gut level and detect lies accurately more than 50% of the time by using objectivity.
That’s when you’ll start to see some real results in your business and personal life.
Would you like to share these safety techniques with your employees?
Feel free to schedule Traci’s online Fraud Spotting training. Are you too busy? I’ve made it super-easy! All it takes is 5 minutes per day to learn how to spot the signs of deception. Here’s a complimentary sample class
Check out these other great articles:
Fraud Preventative Training
Recognize the Subtle Signs of Lying
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