EMPLOYEE FRAUD



Various studies have claimed that employees pose one of the major threats in fraud through their activities in their workplace. Although it can be very difficult to evaluate the loss associated with employee fraud, obviously any fraudulent activity carried out by employees can be very damaging.

What Is Employee Fraud?


There are a number of ways employee fraud can be committed:
• Directly stealing Intellectual property
• Passing on business information to competitors for personal gain
• Passing customer details to third parties in order that attacks may be facilitated against that organization, for example, an employee of financial institution passing customer account details to organised crime groups.

There are a number of perceptions within the financial industry as to how attacks are perpetrated and who was responsible. This list outlines those major concerns:

• The use of temps from agencies was a cause for concern, as the vetting was carried out away from the employing company
• Human Resources departments not sufficiently vetting prospective employees
• There is a general feeling that call centres are vulnerable to attacks
• Corrupt employees that move between companies
• Employees being approached by organised criminals in their lunch breaks, upon leaving work and even whilst on site, and encouraged to pass on customer details.
• Corrupt employees coercing other employees into fraudulent activity.

 

Protecting Yourself Against Employee Fraud


There are basic foundations that can be set in place in any company to combat the threat from within:

• The role of HR and staff vetting Ensure you really do know the individual whom you are employing. Contact their referees - are their references correct? Can their identity be verified, and does it stand up to scrutiny?
• How does your company evaluate loss through crime? How good are the systems in place for identifying whether this crime has been perpetrated by an insider?
• What whistle blowing policies are in place in your company? How are sources protected?
• If your company has an investigative branch, how do they conduct their investigations? Consider a proactive approach to investigations.
• Are staff aware of the risks of becoming embroiled in crime?