The FDIC encourages financial institutions to consider installing a fraud hotline to help banks strengthen risk management and fraud protection. The FDIC has outlined ways that financial institutions can maximize the effectiveness of a fraud hotline.
Awareness: Institutions should advertise and market the fraud hotline to employees, suppliers, third party service providers and customers.
Define Reportable Events: Institutions should clearly define the types of wrongdoing to report. This will cut down on inappropriate reports to the hotline. Risk awareness training is recommended to create a corporate culture that encourages whistleblowers.
Operations: Institutions should assess the costs and benefits of a fraud hotline internally or through a third party. In the long run, saving on loss prevention should outweigh the initial cost of implementing a fraud hotline. The hotline program should be operated by experienced staff and easily accessible by a toll-free phone number or a website or both.
Independence: Institutions should ensure that hotlines are independent from bank management, whether run internally or by a third party.
Privacy: Institutions should ensure the source of information stays confidential by consulting with legal counsel.
Tracking: Institutions should have a secure system to track complaints, the follow up, the investigation, the disposition and the final outcome. Regular updates on the status of the complaint should be reviewed.
Investigations & Reporting: Institutions should decide to investigate on a case-by-case basis. Once fraud is identified, bank management should develop internal controls to avoid future fraud.
With AntiFraudHotline, your institution can respond quickly to potential risks. Our system assures whistleblowers can feel safe about reporting fraud and remain anonymous throughout the investigation process. Managers can build on employee relations by gaining feedback and mitigate the costs of fraud.
Pertinent FDIC Links
Guidance on Implementing a Fraud Hotline
More on Fraud Hotlines