The Advantage of Due Diligence


What is Due Diligence?
Perhaps one of the most important elements of fraud protection is due diligence, which at minimum is a measure of prudence or responsibility that should be exercised in all instances.  Due diligence includes basic reasonable steps that should be taken by an individual or company prior to entering relationships, rather business or personal.

Why Perform Due Diligence?
Checks-and-balances is another term you often hear when discussing fraud prevention.  I consider due diligence a part of my checks-and-balance system.  When performing due diligence my goal is to discover, confirm or refute data. So, I check things out because I don’t want the other party to have more information that I have.  Thus, it’s my responsibility to arm myself with as much knowledge as possible so that I’m in a position of advantage or at least on a balanced playing field.  That way I can make a well informed decision.  I don’t ever enter a situation blindly or rely solely on what the other party tells me.  It’s likely that they will only share data that supports their agenda and withhold pertinent details which may chip away at their foundation, which leaves me on shaky ground.


Due Diligence Involves Research

Be it dating, buying products, employment, no matter the circumstance don’t fail to perform research.  A great research resource is the World Wide Web.  The internet is chock-full of information on any subject matter, so it’s a great place to start.  Leave no stone unturned.  Review social media such as Facebook, Twitter, Instagram, LinkedIn and YouTube.  Search blog posts, consumer reviews, consumer complaints, articles and the BBB (Better Business Bureau).  Another great source of research data is public records.  If you have the time and proximity you can visit county courthouses or record sites to obtain useful information like marriage, divorce, birth, death, mortgage, deeds, liens and judgments. Many areas have these records available online for free or fee.  Discussions with others are also extremely valuable when conducting research.  Word-of-mouth builds or burns reputations. Ask around and find out what people are saying about your subject of interest.  What you’re looking for is information that will help you decide whether you want to enter into relationship, purchase products or be associated with another party. Be on the lookout for confirmation or contradictions in information that has already been provided by the other party. Be sure to document, organize and retain your information for future reference when due diligence efforts are complete and a decision must be determined.

Due Diligence Involves Reasoning
There’s a place for emotion and wishful thinking. But, don’t throw caution to the wind by letting them completely take over when making decisions.  You’ve looked for information and found it.  Your research has a strong voice.  Review your research and listen to what it’s saying. If details are confusing and you have trouble making heads or tails of your data consult a level headed friend or advisor. With a sound mind employ strategic thinking and come to the best possible conclusion for your benefit.
Here are some questions you should consider as you complete the reasoning process:
  • Does this make sense?
  • What is the cost?
  • How will it benefit me?
  • How could it harm me?
  • What are the statistics or track record?
  • Do I have the time and resources to freely commit to this effort?
  • Can I afford it?
  • What is the pit fall or risk?
  • Am I willing to take the risk?




Comments

Post a Comment

Popular posts from this blog

How to tell if your identity has been stolen

Reportedly 143 million consumer's personal identification information (PII) was stolen during the 2017 Equifax data breach.  Equifax is one of the three major consumer credit reporting agencies. Given the type of PII that was accessed, identity theft incidents are predicted to have a significant uptick in the months and even several years to come. Be on the lookout for these red flags.  If these incidents occur your identity may have been stolen. Missing mail, particularly bank and credit card statements You receive statements or outstanding bills for accounts that you don't recognize You receive calls from bill collectors for accounts that you are not familiar with You notice unfamiliar accounts listed on your credit report Upon filing your tax forms, you receive notice from the IRS that your taxes have already been filed You receive notice from your insurance provider regarding services or procedures you didn't receive You receive notice from a business or mer...
Read more

Things You Should Know About the Equifax Data Breach

Image
By: Dorothy Riggs, CFE On September 7, 2017 news outlets began reporting that Equifax, one of the three major consumer credit-reporting agencies, had been the target of a major data breach.  Based on Equifax’s investigation, cyber criminals gained unauthorized access to data from mid-May through July 2017. Equifax confirmed that exposed data includes credit card numbers for approximately 209,000 people and personal identifying information (PII) for about 182,000 people involved in credit report disputes.  PII includes sensitive information such as social security numbers, names, birth dates, driver licenses and addresses. According to reports,  143 million people could be affected by this breach . That being the case, you could absolutely be affected. To find out if your data was compromised Equifax has set up a  ‘Check Potential Impact’  site where you are asked to enter your last name and the last 6 digits of your social.  After doing so, ...
Read more