Setting Up Your Company’s Fraud Hotline

You have probably heard that confidential hotlines are one of the best ways to uncover occupational fraud. After all, when employees steal, their colleagues (as well as customers and vendors) are more likely to be aware of it than are managers in the executive suite. At the same time, those in the know may be reluctant to report fellow workers. Confidential fraud hotlines employees can access outside of work make the decision to report much easier.

But how do you actually set up a hotline and ensure that it is effective?

Easy steps

First, meet with your legal advisor and members of your human resources and operations teams. Address any concerns they might have and secure their support before proceeding. It is important to establish which department will fund the hotline and which individuals will investigate leads, work with law enforcement (if necessary), and communicate outcomes to stakeholders.

Next, select a hotline provider. Although some businesses manage their hotline internally, outsourcing the job provides certain advantages. Extracting useful information from reluctant callers generally is best handled by experienced operators. Using a third party also can help reassure tipsters of confidentiality. Most hotline providers offer secure online portals that make it easy for your company to manage and analyze tips submitted via the hotline.

When you are ready to launch, make sure to strike the right tone. Explain to employees that this tool will help protect your company from financial losses and other negative outcomes such as bad publicity and poor morale that can affect everyone in the organization. Be sure to stress that the hotline is not to be used to report non-criminal activity, such as personality conflicts or disagreements. In addition, explain how your company and the hotline provider are committed to protecting anonymity, to the extent it is possible.

Raise awareness

Sometimes all it takes to stop fraud is a phone call — or even the possibility of one. Simply having a hotline can deter would-be fraudsters because of the increased risk that their actions would be reported. To ensure employees know about your hotline’s existence, post information in common spaces and have managers mention it whenever appropriate. Contact us for more information.

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