The Fraud Examiner

When it Comes to Tips, Having a Policy is Crucial

August 2014

By Scott Patterson, CFE

The message is finally getting out: Tipsters may be the most unheralded front-line soldiers in the fight against fraud. More frauds are detected through tips than any other method. This has been consistently shown in the ACFE’s biennial Global Fraud Study, and the newest statistics from the 2014 Report to the Nations on Occupational Fraud and Abuse further reinforce the point.

Businessweek and other major media outlets are reporting on it, too – many of them making note that other, long-depended-upon anti-fraud controls (such as external audits) are coming up short compared to tips. It is news worth sharing, as the implication is that the “see no evil, hear no evil” approach that many businesses followed for decades is now truly obsolete. To catch fraud, one must see it and/or hear about it. Then one must speak about it.

“That’s great,” your executives or clients might say upon hearing this news. “So, why aren’t our phones ringing?”

If only it were that simple.


A History of Retaliation

Being a whistleblower has rarely been a smooth, pain-free endeavor. The ACFE’s own Sentinel Award is named after Cliff Robertson, the Academy-Award-winning actor who, in the late 1970s, discovered a Hollywood producer was creating phony royalty checks, forging the signatures of those for whom the checks were intended and pocketing the cash. This powerful mogul threatened Robertson, telling him that if Robertson reported him, he’d never work in Hollywood again. Robertson went forward with his report and, as a result, he was blacklisted and wasn’t hired in the film industry until years later.

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