A Highly Effective, Very Low-Tech Way to Stop Fraud

Photograph by Andy Reynolds/Getty Images

Employee fraud is expensive—it’s estimated to cost $3.7 trillion per year, globally—but at least there’s a relatively cheap, low-tech way to limit it: fraud hotlines, it turns out, are remarkably effective. Some 42 percent of fraud cases in 2012 and 2013 originated with tips, most often from employees, according to a recent study by the Association of Certified Fraud Examiners. Yet only half of U.S. organizations had hotlines; only 12 percent offered rewards to whistleblowers.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.