TODAY’S LOSS

PREVENTION
Joshua McAfee C.F.E., C.F.I.
HISTORICAL OVERVIEW
 First codification of law – 1800 BC – Hammurabi’s
Code
 Modern Police Roots – Sir Robert Peel – in 1829 –
COP, Crime Prevention first started
 1980, Association of Chief of Police, made crime
prevention as a standard police function.
 CPO – Crime Prevention Officer – a public servant
with police powers.
 LPO – Loss Prevention Officer – private sector
deriving authority from an employer.
LP FOUNDATION TOOLS
 Five tools that form the foundation of a Loss
Prevention program.
1ST LP TOOL
 RISK ANALYSIS – Estimating expected loss from a
specific threat – has 3 steps:
1. Loss Prevention Survey
2. Identifying vulnerabilities
3. Determining probability / frequency /
costs
Process leads to the Loss Prevent Profile.
LOSS EVENT PROFILE
 LOSS EVENT PROFILE:
1. Type of Risk
2. Probability of Event
3. Criticality of Event
2ND LP TOOL
 PLANNING – Results in a design for reaching
objectives – must fulfill organizational goals –
Respond to:

1. What is cost?
2. Is it practical?
3. Is it cost effective?
4. Will Management support strategy.
3RD LP TOOL
 EVAULATION – A critical tool once program is
implemented. Ways to do this:

1. Pre test / Post test design

2. Experimental / Control Group Design
4TH
LP TOOL
 RESEARCH – Four basic steps:
1. Statement of the problem
2. Hypothesis
3. Testing
4. Conclusion
5TH LP TOOL
 STANDARDS – Promotes uniformity; E.G., UL, NFPA,
OSHA
CRIME ANALYSIS AND LP
 Crime analysis, a systematic approach to studying
crime problems, collects, categorizes and disseminates
accurate, timely and useful information to line
personnel.
 Four specific steps of crime analysis:
1. Data collection
2. Analysis
3. Dissemination
4. Feedback
LP MANAGER
 Lets say something about the LP Manager’s role.
ROLE OF LP MANAGER
 Reflects needs/objectives of upper management
and needs to :
1. Establish Priorities
2. Develop Written Polices
3. Form integrated management teams
KEY QUESTIONS
 Does LP Manager have:
1. Upper Management Support
2. Adequate Budget
3. Appropriate Level of Authority
CRIME PREVENTION
FOUR D’S OF CRIME PREVENTION
 DETER - criminal attacks
 DETECT – attacks that occur
 DELAY – attack to allow time for response
 DENY – access to selected targets
ENVIRONMENTAL DESIGN
 Environmental design, or physical planning, is an
approach to crime prevention in residential and
commercial areas by coordinating efforts of
architects, loss prevention practitioners, and police.
CPTED
 Crime prevention through environmental design
(CPTED) advocates that the proper design and
effective use of the building environment leads to a
reduction in crime and the fear of crime.
CPTED 3 BASIC STRATEGIES
 Natural access control
 Natural surveillance
 Barriers (Territoriality)
“DEFENSIBLE SPACE”
 Written by Oscar Newman
 Strategies from a New York housing project.
 Essence of the concept is that better residential
security can be brought about through
environmental and architectural design coordinated
with crime prevention methods.
ENVIRONMENTAL SECURITY (E/S)
 Is an urban planning and design process which
integrates crime prevention with neighborhood
design and urban development.
 The basic premise of (E/S) – design and redesign of
urban environments so that crime opportunities are
reduced. It has no effect on white collar crime.
REDUCTION OF CRIME THROUGH
(E/S)
 Increased perpetration time – more difficult to
commit crime
 Increased detection time – enhanced by lighting,
landscaping, etc.
 Decreased reporting time – more observation by
many people
 Decreased police response time
Defensible Space Concept

 Territoriality – attitude of maintaining perceived

boundaries. Outsider quietly recognized, observed.
 Natural Surveillance – ability of inhabitants to
casually an continually observe public areas.
 Image and Milieu – involve the ability of design to
counteract the perception that the area is isolated
and vulnerable to crime
 Safe Area – high degree of observation by police
RISK MANAGEMENT
 Next will will discuss the subject of risk.
CATEGORIES OF RISK
 Personal
 Property
 Liability
RISK ANALYSIS
 First tool is assessing risk.
 PML – assesses vulnerability and responses to risk
1. Possible maximum loss – if target is totally
destroyed or lost.
2. Probable maximum loss – is amount of loss a
target is mostly likely to sustain
ALE
 Annualized Loss Expectancy (ALE) – this formula is
used specifically when doing a quantitative risk
analysis – such as terminating if another generator
should be added to the plan used when computing
a return on investment (ROI)
Crime Risk Management

 Risk Avoidance
 Risk Transfer ( Buying Insurance)
 Risk Abatement (Reduction)
 Risk Spreading
 Risk Acceptance (Wish for the best)
INSURANCE RATES
 Insurance rates are dependent on two variables:
1. Frequency of claims
2. Cost of each claim
BONDS
 BOND – Legal instrument where one party agrees to
indemnify another party if oblige incurs a loss from
the person bonded.
 Type of Bonds:
1. Fidelity Bond – if bonded employee after
investigation to limit risk, violates the trust, the
insurance indemnifies the employer.
2. Surety Bond – Failure to perform as agreed
(Contract Bond)
INTERNAL THREATS
 Next we will discuss internal threats and losses.
PREVENTION FROM INTERNAL
THREATS
 Internal theft is the greatest on going threat to
business.
 It is difficult to obtain accurate statistics as to
shrinkage attributable to employee theft.
 Internal losses occur by several methods:
1. Pilferage – stealing in small quantities over a long
period.
2. Embezzlement – taking money/property entrusted
to their care.
3. Shrinkage – loss of inventory through any means.
WHY EMPLOYEES STEAL
 Personal Problems
 Environmental Influences
 Rationalization
THEFT TRIANGLE
 Motivation ( Desire or Need)
 Rationalization
 Opportunity
DANGER SIGNS
 Counter productive behavior
 Conspicuous Consumer
 Financial Irresponsibility
 Financially squeezed employee
Management Countermeasures
 Internal Controls / Separation of responsibility
 Auditing (Inspect what you expect)
 Management Support
 Policy and Procedural Controls
 Hotline
 Thorough Investigation
 Confrontation with employee suspect
 Prosecution
PHYSICAL COUNTERMEASURES
 Access control
 ID systems
 Lock / Key Controls
 Alarms
 CCTV
 Safes / Vaults
SAFETY
 Lets review some LP safety issues.
SAFETY AND LP
 Unsafe acts cause 85% of all accidents, unsafe
conditions cause the remaining 15%.
 Incident – is anything from serious injury to a
breakdown in quality control
 Accident – is an undesired event resulting in
physical harm to a person or damage to property.
ACCEPTABLE WAYS TO REMEDY
ACCIDENTS
 Constant inspections
 Job safety analysis
 Early discovery of unsafe conditions
 Identification of hazards
 Investigation of all accidents and near misses as
soon as possible
HAZMAT
 Hazardous Material Program:
1. Identify hazards that are present
2. Know how to respond to an incident
3. Set up necessary safeguards
4. Employee training
5. MSDS (Right to Know Program) in place
PLANNING AND BUDGETS
PLANNING
 Planning – designed to fulfill organizational goals /
objectives. Can be:
 Simple
 Complex
 Short term
 Long term
Budgets

 Top/down
 Bottom/ up

What is a budget – a plan stated in financial

terms.
Types of budgets:
 Line item – each item expressed by line

 Program – expenses are appropriated for specific

activities / program or project.

 Capital Budget – infrequently purchased / high

dollar items
A BUDGET REQUIRES …..
 A manager to operate the plan in three dimensions:
1. The operation /project must unfold as planned.
2. The operation / project must take place when
planned.
3. It will not exceed the planned costs.
BUDGET COSTS
 Budget costs are classified under one three
categories:
1. Salary expenses
2. Sundry expenses – all non – salary expenses
3. Capital Expenses – which are physical
improvements, physical additions or major
expenditures for hardware, generally considered one
time expenses.
Thank You
 I hope you found this LP review helpful.
 I wish you all the best when you are taking your
exam.