In legal terms, ‘fraud’ is generally as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. Unfortunately for business owners across California, fraud in business has reached shockingly high numbers, which affects the business’s bottom line. A recent survey showed that 88% of all United States companies had experienced significant financial losses due to some form of fraud.
When it comes to business fraud, the most common culprit is often one of the least suspected: a long-time, seemingly loyal employee. What’s more, certain departments are more susceptible to fraud than others. In fact, 80% of all fraudulent activity and 95% of all money lost can be traced back to employees in one of six different departments within a business: accounting, customer service, purchasing, sales, operations and executive or managerial positions.