Fraud is often envisioned only in terms of financial losses and recovery strategies. However, the human element—its psychological impact on individuals and organizations—is frequently overlooked. In Trustpair’s first Fraud Flash series, Lee-Ann Perkins, an assistant treasurer with decades of experience, provides her insights into the emotional and operational upheavals that successful fraud can cause within an organization.
The Emotional Weight of Fraud Investigations
Lee-Ann’s experience with fraud seems drastic – but is unfortunately not so uncommon. In one instance, after her company fell victim to check fraud, the FBI intervened. As the primary account signer, Lee-Ann faced intense scrutiny, undergoing an interrogation that left a lasting impression.
“Having the FBI come to my company and not tell anyone what was going on but ask to speak to me in a locked conference room…. It was kind of a trauma and a difficult time for me!” Lee-Ann recalls.
This episode wasn’t just a professional crisis – in the end, the funds were recovered – but a personal ordeal. It reinforced Lee-Ann’s belief that fraud should be taken seriously by companies that often remain in an “it won’t happen to me” mindset.
The Ripple Effects of Fraud on Teams
Another fraud incident involved ACH fraud at a different company. An employee was manipulated into bypassing standard procedures due to a sense of urgency crafted by the fraudsters. The involved employee suffered from severe guilt and a tarnished self-esteem, as whispers of the incident spread throughout the company. This not only affected his professional life but also his personal well-being.
Lee-Ann highlights, “Successful fraud inflicts more than financial harm. It definitely can erode trust. It leaves emotional scars and it affects and impacts the victim’s sense of peace of mind, the confidence about what they do at the company.”
Understanding the Broad Impacts of Fraud
Lee-Ann shares her experiences to emphasize the broader consequences that go beyond financial losses. These soft impacts of fraud, such as reduced employee morale and a tarnished company reputation, can sometimes exceed the direct financial damages.
Advice for Treasurers and Financial Leaders
Lee-Ann’s advice to her peers in treasury and finance focuses on vigilance, prevention, and acting quickly if fraud occurs.
“Time is of the essence in any fraud attempt. The sooner you know the sooner you can react and the sooner the bank or financial institution can put a freeze on the account you sent the funds to or can help reverse the funds. If you don’t act immediately, the chances of loss and never getting the funds back are much greater.” she advises.
Recognizing that time is of the essence in preventing and responding to fraud incidents is vital for minimizing their impact.
Fighting Back: Strategies to Mitigate Fraud
Solutions like Trustpair play a crucial role in fraud prevention by providing automated account validation that ensures every payment reaches the legitimate beneficiary. Partnering with software like Trustpair, which integrates seamlessly with existing systems through native connections to platforms like Coupa, Ivalua, JAGGAER, SAP, and Kyriba, enhances the efficacy of fraud prevention strategies. These integrations facilitate real-time data validation, crucial for timely and effective fraud prevention.
To conclude
The lessons shared by Lee-Ann are invaluable in understanding that the cost of fraud is not just a line item in a financial statement but a deeply impactful issue that can affect individuals and team morale. As the financial landscape evolves, so too must our strategies to protect not just our assets but also our people from the hidden costs of fraud. By preparing and protecting, companies can ensure that their teams are not only financially secure but also shielded from the psychological impacts of potential fraud, fostering a healthier, more resilient organizational culture. To protect your business with automated account validation, book a meeting with us!
