According to CIFA’S, the credit industry’s counter-fraud watchdog, warning signs of employee fraud include:
* Staff under stress without a high workload.
* Marked personality changes.
* Always working late.
* Reluctance to take holidays or to delegate work, especially when on holiday.
* Unexplained wealth or living beyond apparent means.
* Sudden change of lifestyle.
* Customer complaints of missing statements, unrecognized transactions.
* New staff resigning quickly.
* Cozy relationships with suppliers/contractors.
* Suppliers/contractors that insist on dealing with just one individual.
* Rising costs with no explanation.
* Key employees having too much control or authority without audit checks.
* Employees with external business interests.
In a study conducted by Leicester University, over 70% of employees admitted they would commit fraud if they knew they would get away with it. Fraud is estimated to cost the UK economy between £13 billion and £16 billion a year and fraud by employees accounts for 60% of all frauds committed against business.
A lack of resources means that police response to fraud is patchy, particularly outside London. When it comes to gathering evidence, the onus is likely to be on the employer. The problems are also made worse by ‘targeted’ fraud, which are often organised by criminals. In these cases, an employee, often using a stolen identity is ‘planted’ in an organisation with the express intention of carrying out a fraud.
If you do suspect fraud, we recommend that you take legal advice immediately. You will need to gather evidence that will stand up court but all data gathered on employees must comply with the Human Rights Act and the Data Protection Act. If your suspicions are proven incorrect or you act in a way that breaches an employee’s employment law rights you take the risk of being taken to an employment tribunal. So always make sure you carry out full identity checks on any new employees.