The Undeniable Power of a Hotline Service: Findings from the Association of Certified Fraud Examiners

The Undeniable Power of a Hotline Service

On March 31, 2022 the Association of Certified Fraud Examiners (“ACFE”) released its biennial “A Report to the Nations,” the most widely respected study on occupational fraud.  In its release the ACFE stated “42% of cases were detected by tip — nearly three times as many cases as the next most common detection method.”  Specifically, the study states:

• “Maintaining a hotline or reporting mechanism increases the chance of earlier fraud detection and reduces losses.”
• The median victim of fraud that has a hotline incurs approximately $100,000 of losses over 12 months. Those without a hotline lose approximately $200,000 over 18 months.
• 42% of frauds are detected by tips, which is almost 3x the next most common method.
  • More than 50% of tips came from employees.
• At organizations victimized by fraud, 47% of frauds were uncovered by a tip if a hotline was in place. Only 31% of frauds were uncovered by a tip if no hotline was in place.
• Organizations without hotlines were 2x more likely to uncover fraud by accident versus those who do have a hotline.
• Since 2012, the percentage of tips made though hotlines has increased from 42% to 58%.

Of course, a hotline service doesn’t just uncover fraud but can uncover anything unethical or unsafe.  Are you protecting  your employees, assets and reputation?  We serve clients large and small in over 60 countries and we can help you.  www.RedFlagReporting.com .