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Employee Fraud increases causing recruitment concern
The latest figures released by anti-fraud organization CIFAS show that employee fraud has increased by 69%compared to the previous year. Figures for July 2008-June 2009 show that reports of employee fraud have risen, with the recession largely being blamed for the increase.
The figures show that 69% of reported employee fraud was due to dishonest actions by staff to obtain benefit by theft or deception. This often was due to falsified expense or timesheet claims, or manipulating targets to receive higher bonuses.
Worryingly for recruiters, employment application fraud has also risen; the number of fraudulent job applications rose by 50%, although there was a decrease in those that were unsuccessful. Whilst the unsuccessful figure has dropped, it could be suggested that this is as a result of lower recruitment numbers due to a tougher economic climate, and certainly the rise in successful false applications will be a worry for recruitment managers and employers alike.
Account fraud also increased, as did the number of reports of staff accessing personal data without permission. This can cause untold damage, as these types of frauds potentially affect customers and not just the internal organization, leaving employers at the risk of damage to their reputation and brand name.
There has also been a large increase in the number of female employees being reported for fraud; again this trend is also being pinned down to the recession, with Fraud Adviser, Arjun Medhi of CIFAS commenting: “As wallets and purses get squeezed, it is surprising to see how many more women feel compelled to attempt fraud against their employer."
Employers and recruiters are being warned to remain vigilant and aware of the increased risk as finances continue to be difficult for some staff, especially around the Christmas period. Employee applications should be carefully vetted, and where possible identity verification should be used, alongside a robust referencing process. For more information on employee screening to prevent fraud, please see our recruitment compliance page.
The full report from CIFAS is available here.
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