How To Prevent Theft and Fraud if You Own a Payday Loan Company

First lets start by the different ways that employees can steal:

* Pulling money out of the drawer or skimming from the top

* Using non-cash transactions, like discounts, offsite payments, depositing personal checks or write-offs, as a substitute for cash payments, also know as, tricking the system

* Making fake loans

* Robbing a store

Let's attack these one at at time.

1) Pulling money out of a cash drawer and putting it in their pocket. This is the easiest type of theft to catch. This is a result of weak internal controls by the company. For example, telling your employee how much money they should have, gives them something to work with. With this in mind, balancing the cash on a *daily basis* is the best way to prevent skimming from the top.

2) Using non-cash transactions, like discounts, non-cash payments like ACH or Deposits or writing off an account, as a substitute for a cash payment. This is an easy method for catching people because it should be obvious in the reports. Again, theft via this method can usually be attributed to someone not doing their job and looking through reports. Some software systems do not allow discount transactions and force the store personnel to call a higher level user to perform the discount. Since most payday loan software systems id and time stamp each transaction, this is a risky method for the thief to use. Which payday loan software does the best job is debatable.

3) Making fake loans. Imagine the scenario, your store is performing great and numbers are up across the board. This is a red flag that most owners want to ignore. Fake loans are probably the most costly and common fraud because there is no limit to how much an employee can steal before they're caught. It can also be difficult to prove sometimes. Fake loans are typically discovered via an audit or when the file gets handed over to a collections person who speaks to a confused person claiming to never have taken a loan.

Sometimes, there are multiple employees involved, which makes it even more difficult to detect. This scenario is most prevalent where there are not enough checks and balances in the system. For example, if the employee making the loans are also collecting on loans that go bad, it's almost impossible to catch this person.

4) Robbing a store. A store robbery is a terrible thing. Not only does it scare employees and cost the company time and money, but it also hurts company morale. Many robberies are either inside jobs or robberies that result from employees talking about store security and procedures to friends and acquaintances. Never allowing customers behind the counter is a good idea. Some customers will try and use your bathroom, so they can see if there is a safe or alarm system in place.

The biggest mistake is when a company hands out a large amount of cash to a borrower. Once customer learn that there are large amounts of physical cash on the premises, it makes your company a target. By not keeping large amounts of money you lower the chances of a store being robbed. Writing checks to customers or an ACH for large amounts of borrowed money is a good alternative. Other ideas is to give part of the loan as cash and the remaining as a check ($100 cash and a $400 check). Also, the use of stickers and signs describing these policies on the door and windows, of the business, can assist with this.

I've seen signs stating that the safe is time locked. I think even talking about safes is a bad idea because it creates the idea that there is lots of money inside the store. This situation can lead to armed robbers holding up a store after closing time. Robbers will wait 25 minutes, if they know there is a big score involved.

My name is Nick Sparagis and have been doing business since 1999. I am a part of Intro XL, a payday loan software company.

We don't sell you software. We help you buy it.
http://www.introxl.com