Could the Global Supply Chain Shortage Lead to Increased Fraud? (And How to Avoid It)
The global supply change shortage is having an impact on pretty much every industry, and of course parking is no exception. Organizations are waiting months for resources and equipment that used to just take a matter of days. Container ships are sitting out in the water waiting for the go ahead to come to shore and be unloaded due to a significant decrease in workers. It’s impacting everyone from major corporations to individuals waiting for their Amazon deliveries.
Some organizations have stated that due to these supply disruptions, they have experienced production and shipping delays, as well as the reduced availability of materials. This has resulted in price increases for those goods, increasing the pressure to raise prices on customers. This of course leads to an overall reduction in revenue growth.
Anytime there are disruptions of this scale, there are those that seek to take advantage of the chaos, or those that feel pressure to make their financial incentives or budget responsibilities. This can result in Financial Statement Fraud.
Many parking organizations utilize some combination of PARCS equipment, automation, contactless platforms, etc. to reduce the chances of their finances being compromised. But given situations like long lead times for new equipment and reductions in staff, there could be vulnerabilities in these systems – and parking operators should be on the lookout. While automation can significantly reduce the risk of fraud, during these complicated times it is important to pay extra attention to the books. You can actually harness the strengths of your automated parking resources, people, and data to understand your operation’s needs and protect your data.
Another issue that is putting organizations at risk for fraud is what methods are being used to source materials. For example, with microchips being in short supply, organizations are sourcing them from whomever they can instead of their normal vetted suppliers. Microchips are of course used in many technologies, including enforcement devices and smartphones utilized in parking. Often these sellers are opportunistic scammers who will send faulty, fake, or counterfeit products. If this occurs you can report it at erai.com, a U.S. based association that tracks these fraudulent products and keeps databases of the websites selling them.
It is essential to understand the significance of the operational process in combating potential fraud. As processes have moved away from a decentralized setup to a more secure but more automated process, organizations must increase their awareness and what to look for to protect their and their customers’ sensitive data.