We live in a society that is becoming increasingly “cashless.” The convenience of using debit and credit cards for transactions started the trend. Society’s shift toward online commerce added fuel to the fire. And when Covid hit, the desire for contactless payments made cash transactions become even less common.
Since many dentists believe that cash is the only thing a thief could steal, logically, this gradual disappearance of cash from our lives should result in less stealing. And yet studies show that the opposite is true. Parallel studies conducted by the American Dental Association in 2007 and 2019 reveal that in that 12-year period, the frequency of embezzlement increased by about a third, with 47% of dentists reporting in 2019 that they had been embezzled at some point in their careers, up from 35% who reported this in 2007. While the frequency of embezzlement in the Covid years has yet to be studied, our own unscientific numbers show a noticeable further increase in embezzlement activity.
While cash is the first choice of every thief, these numbers clearly suggest that stealing cash is not their only choice.
While, for obvious reasons, we will not delve into specifics about how thieves steal non-cash payments made by check, credit card or the various other ways that dental practices get paid, we will mention that a smart and adaptable thief (which describes most of them) will usually find a means to monetize other payment types. Here are a few factors that probably help them.
Processing routine banking transactions was traditionally a labor-intensive activity. Just like in other parts of our lives (when was the last time you saw an actual parking lot attendant?), banks have discovered that it is far less expensive to automate routine functions than to have them handled manually. Automated processing is better at some things and worse at others, which may open doors for embezzlers.
Celebrated fraudster Frank Abagnale (the subject of the Catch Me if You Can movie and book) compared the frauds he committed in the 1960s against what could be done using current technologies. His chilling comment was, “What I did was almost 50 years ago, and it’s about 4,000 times easier today.”
There have been many technological innovations in the processing of non-cash transactions. The journey from the paper imprints of credit card information 30 years ago to merchant terminals and the ability to tap a credit card has created opportunities along the way. Similarly, check scanners, online banking, electronic funds transfers and the emergence of money transfer companies like PayPal and Venmo have all opened some doors to would-be thieves.
There was a time when forging a document took really expensive equipment and technical expertise. With most households having a computer and a high-quality printer, forging virtually any document is now possible.
Almost inevitably, the protective systems in use in practices are updated far more slowly than new technologies emerge leaving gaps that a thief can exploit.
First, dentists need to broaden their thinking to recognize that non-cash theft exists (and in fact accounts for the majority of dollars embezzled.) Next, practice controls, some of which originated in the 1950s or 19690s, need to be modernized to reflect modern technologies and business practices.
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