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Quarter 2, 2013


Fighting Friendly Fraud: Five Insider (Theft) Secrets

John Sileo became a nationally recognized fraud expert through first-hand experience – a trusted friend and business associate took him for hundreds of thousands of dollars and ruined his software business. "Friendly fraud is a lot like a bad relationship," says Sileo, "because it takes you by surprise, it starts off too good to be true, and you often end up in court and out of money."

In a recent online presentation, Sileo outlined five insider theft secrets and what you can do to counteract them:

1. Your denial exposes you.
"It won't happen to me...we're too small to target...I trust him – he wouldn't dare." Almost every case of fraud follows this same pattern of denial. Saying one or all these things to yourself should be your first red flag. Fortunately, acceptance of a few simple facts can neutralize your denial: "Fraud can happen to me, my business is exactly the right size, the fraudster will be someone I trust, and prevention costs much less than recovery."

2. Bad habits attract fraudulent behavior.
If you don't do background screening or check candidates' references or conduct any additional do-it-yourself research, you're a prime target for friendly fraudsters. Due diligence solves the problem quickly and easily: Conduct background checks and verify references through a professional service and use public online tools like LinkedIn and Facebook to check up on candidates you're considering.

3. Need + opportunity = corruption.
According to Sileo, 87% of fraudsters are good people who make bad choices under pressure. A drug habit. Gambling debts. Bad personal financial decisions. These are the kinds of needs and pressures that can motivate fraudsters. Once you train everyone, including yourself, to recognize those needs and understand opportunity 'hot spots' within your organization, you're that much closer to shutting down friendly fraud.

4. The lack of conspicuous controls condemns you.
If a fraudster knows you're not taking preventative steps, he'll soon be taking advantage of the situation. The answer here is deterrence through oversight. Provide convenient means to report suspicious activity (50% of all occupational fraud is detected via tips). Perform conspicuous, unexpected fraud audits. Add ethical conduct language to employment agreements. Set up fraud awareness training. And, don't just implement these controls, advertise them openly and often.

5. Emotions can quickly sabotage recovery.
If you do become a victim of friendly fraud, the worst thing you can do is react emotionally. Keep your temper in check. Refrain from making unsubstantiated accusations. (They could lead to a defamation lawsuit, even if the suspect actually committed the crime.) Limit the number of people you tell and start building your case in a methodical and detailed way.


Avoid These Five Direct Marketing Campaign Killers

Like most business owners in today's challenging economy, you're struggling to generate a positive return-on-investment of your marketing dollars. To make sure you're not throwing that money away, you need to be aware of – and avoid – these five potentially deadly mistakes that all too many businesses make all too often.


Using a bad list image 1. Using a bad list
The mailing/contact list is the most important facet of any direct marketing campaign. Whether it's for a direct mail effort or an email blast, your list of recipients must be up-to-date and targeted with laser precision. A bad list will either cost you money, kill your campaign or both.

Not including an offer image 2. Not including an offer
If your direct marketing campaign doesn't offer your target audience something beyond an inventory of your products and services or a treatise on how long you've been in business, your direct marketing campaign is doomed. It's crucial to consider offering a tangible, perceived, beneficial reason for people to take action. Examples include discounts, coupons, complimentary consultations, analyses, diagnostics or other value-added services.

Depending on dull copy image 3. Depending on dull copy
Did you know that 77% of recipients sort through their mail immediately?* Which means you have just a few seconds to be fascinating. Dull, unexciting copy – in whatever medium – won't do a thing to grab your audience, but it will ensure that your communication is ignored and discarded.

Neglecting the Call-To-Action image 4. Neglecting the Call-To-Action
Once you've interested prospects with what you have to offer, you've got to tell them how to take advantage of it or your direct marketing effort will pass unnoticed. "Call today." "Complete and return this card." "Log on to this special landing page." These are all examples of the all-important CTA that turns readers into reactors.

Not hiring a design pro image 5. Not hiring a design pro
Amateurish design will do nothing to attract attention, highlight your offer or drive recipients to the CTA. Put the look and feel of your direct marketing in the skilled hands of a design professional. It'll go a long way toward engaging your audience, delivering your message, generating response, and properly positioning your company.

To learn even more about improving the quality and effectiveness of your direct marketing program, call or email your Safeguard consultant today.

*Statistically Speaking, Direct Mail Soars to New Heights, Deliver Magazine, July 1, 2011