Credit Matters Blog

Are Fraudsters "Grooming" You And Your Employees For Loss?

Kim Radok 14 September 2017


We recognise the meaning of the word grooming when used in the context of child exploitation by sexual predators. When you understand how criminals and fraudsters operate, we can also say they "groom" businesspeople and employees. The objective of the criminal or fraudster is to manipulate the manager or employee in to believing they are genuine customers.

There are several examples of grooming in business. One example is when a customer starts buying small and pays the invoices promptly. After several months of paying promptly, the customer places a much larger order. Based on their past payment history, the customer is often supplied without question. On receipt of the product, the customer disappears and leaves a bad debt.

Another example of grooming is when criminals target a business and hope to find disenfranchised employees. These employees are willing to exchange valuable commercial data to get revenge on the business or somebody they don't like, feed their gambling or drug habits, lifestyle needs, or to alleviate other financial problems.

Outsourcing your financial and customer service roles to overseas organisations is another area of business which is a target for criminals. Criminal gangs often frequent the local community around these outsourcing overseas firms. They are on the lookout for disgruntled employees or those desperate for more money. The criminals mingle with the outsourcing firm's employees in their after-hour social activities and try to become their friends. If the criminal is successful, they can gain vital commercial knowledge or direct access to the outsourcing firm's customers data.

In regards to technology, it is a tool which can assist in achieving increased efficiencies and profits. Unfortunately, technology is also a major tool of criminals. The fact is unfortunately, the technology used by criminals today is often more sophisticated then that used by business. For instance, technology is already being used by criminals to gain access to an organisation's data to build a profile of their key financial employees and operational processes.

To illustrate how valuable a strategy of grooming people is for criminals and fraudsters, here are three other examples.

The grooming of bank managers and lending officers has happened regularly over the years. It is not hard to understand why they were targeted. It is because they had access to the money. In these situations, the targeted managers and employees are offered free concert tickets or to other major events, lavish meals and made to feel important etc. These offerings are designed to make the employee believe the fraudster is a wonderful person. Unfortunately, the true reputation of the masquerading fraudster is rarely evaluated properly as a result.

Another target for grooming by criminals, are police and other law enforcement personnel, government bureaucrats and others in government organisations.

The increased focus on sports gambling today, means sportspeople are also targeted. Age regretfully, is no barrier. The major sporting codes in Australia, are starting to realise sportspeople as young as 16 years of age, are being targeted. The sporting codes therefore, are now providing young sportspeople with the information and support to help them understand how they may a target for grooming by criminals.

Grooming is one of the strategies used by criminals and fraudsters when targeting your business's cash and assets. Increasingly, management must focus on how they, and their employees, can be groomed. If management does not focus on preventing grooming strategies from succeeding, their organisations are at risk of losing their cash and assets.