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PRESS RELEASE
The Integrity News
Vol. XII No. 27
ISSN 1081-2717

October 4, 2003


BusinessWeek Online
September 24, 2003


The High Cost of
Penny-Ante Scams

Scam artists are out to take money from businesses.    The article is full of examples.    The essence of the advice is that you need to do your due diligence -- check out those who will work for you, and those with whom you will be doing business deals.

KNOW WHO YOU ARE DEALING WITH.

"Companies generally have limited amounts of assets, they are usually reluctant to spend money on anything that isn't generating revenue, and so they don't do the proper due diligence before they hire people, or make deals.    Unfortunately, these companies get burned quite often in scams."

The article emphasizes the importance of checking references, and verifying employment and education claims.    In business deals, check out the prior deals of the group.    This is a good way to be tipped off that some claims made to you were bogus, and so you should be suspicious about the subject's other claims.

Try to talk with individuals who will be references in addition to the ones provided directly by the subject.    It is also important for you to check for a civil litigation history.    A civil litigation history should tell you about who the subject has sued, who has sued the subject, and any restraining orders on the subject.

For years, The Integrity Center has been telling clients that in addition to outright financial and material theft, companies must protect intellectual property like customer lists, marketing plans, blueprints, formulas, graphic designs, and other components of their business processes.

"Many companies are particularly at risk for fraud and embezzlement because they don't have in-house departments set up to prevent it, and they don't think that they have the funds to get outside help."    In fact, checking someone out is not expensive.    This is all the more true in light of the potential loss if you don't conduct good due diligence.

"Companies tend to be too trusting.    They don't exercise good judgment in finding out who they are really dealing with.    Most of the time scammers are good talkers."    The article goes on to say that resumes, and the paperwork of business deals, are often simply bogus.

The article also discusses the fact that in business deals, you really need to go see the operation.    Make sure that you get full access to any books.    Ask yourself if things really "add-up".

Remember that once a fraud has occurred, the money or property is usually gone for good.    Realize that the smaller the company, the closer a fraudulent event can come to completely wiping out the organization.

Don't hesitate to put the Authorization paperwork that will permit you to check, in front of the subject.    If the subject turns you down, you will have gotten your answer at no charge.


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