A significant increase in employee fraud has become an unfortunate byproduct of the current economy—and title companies are not immune to this trend. “Employee fraud is occurring at all levels within all business segments. Settlement Agents be they Law Firms, Title Agencies, or Escrow Companies unfortunately are well represented when it comes to fraud even among senior management and ownership,” says Dick Reass the founder and developer of RynohLive. “Some senior executives are operating as if they still have full ownership of all the funds held by the company, and are also turning a blind eye to operating agreements that have been entered into with their ownership group. For settlement agents it is also a failure to recognize that the escrow funds are held in trust for others”
Not only do these actions potentially cause serious financial damage to a company, but it often results in costly litigation, loss of assets, irreparable damage to the company’s reputation and loss of consumer trust.
According to a recent survey conducted by the Association of Certified Fraud Examiners, fraud cost American businesses $994 billion last year, amounting to 7 percent of all revenues. What’s more, these estimates don’t include losses due to the Madoff investment scandal.
As staggering as these aggregated figures are, they do not fully convey the impact of a fraud incident on a particular business. With more than 60 percent of schemes costing an organization more than $100,000 per occurrence, many businesses never recover from the damage. Small and medium-sized entities are especially vulnerable, suffering larger losses on a per-incident basis than larger organizations. Given this, it’s not surprising that employee theft causes more bankruptcies than any other crime.
Unfortunately, the outlook for fraud is expected to worsen. More than 80 percent of respondents indicated that they expect the incidence of fraud to increase and 36 percent expect it to increase significantly.
The number one way to prevent and detect fraud is with RynohLive, an affordable, comprehensive solution that works with any bank and accounting software. RynohLive is the best solution for any business that wants to be audit ready, ensure accurate and timely reconciliations and catch errors or fraud. It’s ideal because it is fast, operates in near real-time and takes fraud and other disbursing losses out of the equation.