Good Fences And Not So Good Neighbors: Property Law 101

Protecting Yourself From White-Collar Crime

30 April 2018 by Hunter Moore

If you run a small business or start-up, do you really need to worry about white-collar crime? 

You bet. While most people think that white-collar criminals only go after the big bucks and the big businesses, the reality is that it can happen inside any business. If it happens to yours, your business could really suffer -- and so could your reputation. Here is what you should consider.

Recognize That White-Collar Criminals Could Be Working For You

White-collar criminals aren't all mysterious hackers hidden behind computer connections while they siphon your hard-earned money into overseas bank accounts. They might be the cashier who has worked for you for five years, the bookkeeper you totally trust, or the night manager you've known for a decade.

A lot of white-collar criminals start small. Sometimes they have a serious financial need that isn't being met -- so they convince themselves that they can just "borrow" the money and put it back later. Others suffer from shopping and gambling addictions they're struggling to keep hidden -- and all that money going through your business just gets too tempting when they need their next fix. As time goes on, the small thefts get easier to justify and easier to do.

Of course, money isn't the only thing of importance a white-collar criminal might take. Information -- especially about clients, credit cards, and intellectual property -- all have value.

It doesn't serve your interests to believe that you couldn't fall victim to this kind of activity. Start protecting your company by accepting the fact that even good people can do bad things.

Take The Following Measures To Protect Your Livelihood

There are some basic steps every small business owner needs to take to improve his or her company's security. They include:

1. Updating Your IT: Your network security is important to your survival. If you're operating on outdated software or equipment, get a tech consultant in the door -- fast. Otherwise, you are leaving your company exposed to both internal and external sources of online theft. You're also risking a lot of legal liability if your clients' or customers' private information gets stolen.
2. Do Background Checks: When you started your business, you probably knew every employee personally for quite a while. Has that changed? If so, it's time to start paying for background checks. Otherwise, you could be hiring someone with a history of theft without even realizing it.
3. Create A Fraud Awareness Program: Let your employees take some of the responsibility for policing the business -- and each other. Talk about the types of activity that should alert someone to less-than-honest dealings and make sure that everyone knows where to report any suspicious activity.
4. Use Employee IDs: Require identification codes for access to anything that could expose your company to the risk of theft. That includes access and log-in identification for computers, cash registers, storage compartments, and anything else that might be a source of interest to a thief. That helps track who accessed something -- and makes it easier to identify patterns of suspect behavior.

If you are the victim of white-collar crime, talk to a business lawyer promptly. Your company could be liable for financial losses to your vendors and customers if your security was lax. You may also need advice on damage control in order for your business to survive.

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