Page 108 - Crisis Communication Practical PR Strategies

Fraud 89
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Gather the facts

As a first step, the expeditious gathering of facts is crucial, because
those who speak on behalf of an organization accused of fraud need to
quickly establish their own credibility to effectively rebut unsubstanti-
ated charges. If the charge that the organization you represent made a
misleading or fraudulent claim does appear to have merit, the crisis
management team need to convey quickly and effectively how the
problem is being (or already has been) corrected and what measures
are being taken to see that it will not happen again. Conversely, if the
very serious charge of fraud is unsubstantiated, a strategy to explain
how and why must be developed quickly. Calls for a retraction from
the party or news organization that made the charge may be appro-
priate.
If those in charge of crisis management find that fraud did, in fact,
take place, they must quickly establish whether it was inadvertent (ie,
representations made in good faith, but defeated by poor perform-
ance or unanticipated factors) or is a more serious fraud involving
deliberate deceit by an individual or part of the organization. This is
crucial, because in public perception the difference between uninten-
tionally misleading communication, on the one hand, and deliberate
deceit on the other, is substantial and requires very different responses
on the part of the PR crisis management team.

A promise unfulfilled

An example of the former occurred when a home mortgage
company that promised to process low-interest home loan
applications within a specific time period was unable to keep this
promise because a sudden drop in interest rates created an
overload of loan applicants who wanted to refinance their
homes. A Chicago-based financial columnist, who also appears
regularly on local television, took up the complaints of dissatis-
fied applicants and began to pound the company relentlessly in
both print and her television commentary.
Fact-finding by the company quickly established that the
problem was widespread in the mortgage loan industry. A
sudden drop in interest rates had caused a surge of applications
among homeowners seeking to refinance their home mort-
gages. Title companies and other players in the home finance
network were also overwhelmed and most mortgage companies