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3 Ways to Prevent Employee Fraud in Business

In 2018, there were 324,000 instances of recorded fraudulent activity, a 6% increase since 2017, according to Cifas (a fraud prevention service). As many businesses have found out, internal fraud can be the most damaging to the reputation of your business and custom.

Internal fraud refers to fraud that is committed by employees against an organisation. Examples of this are theft of cash/ stock, tax evasion, misuse of confidential information, theft of data and impersonation.  

Cifas found that dishonest action by staff was the most common type of internal fraud, accounting for 46%, in 2018. Here we provide advice on how to reduce the risk of employee fraud in business, putting preventative action in place to maintain the trust in your brand, whether you’re a large or a small company.

1) Make the consequences clear

Ensure you have appropriate policies in place where you outline your company’s position on fraudulent activities and make the consequences of breaching the policies very clear. If a fraudster is aware that there are consequences to their actions, they are more likely to be deterred from committing the crime.

2) Keep a record of annual leave

Keeping track of your employees’ holidays may help to highlight potential patterns of fraud, according to BizJournals. Employees working a lot of overtime and rarely requestesting time off could be an indicator of someone trying to cover their tracks. Ensuring that every employee has time off could provide you with the opportunity to identify any changes and gives any potential fraudster less time to conceal their actions.

3) Reduce the risks with background checks

Carrying out regular background checks on your staff may help you to take steps toward employee fraud prevention. This should begin from the moment you’re making recruitment decisions within the business. If you employ people without performing the necessary background checks, you wouldn’t know of their potential past criminal history. Additionally, never get too comfortable with staff who have been with the business for a while; if you aren’t regularly performing background checks, there could be changes to an employee’s criminal record that you’re unaware of.



How we can help you?

We offer a range of different background checks that can help to protect your reputation and organisation from various forms of fraud. Some examples can be found below:

Adverse Financial Check - An Adverse Financial Check will reveal any adverse (potentially harmful or unfavourable) information regarding financial or credit history. This check is used mostly for employment purposes to provide the employer with reassurance when considering an employee for a role. This may be especially relevant if you plan to place the applicant in a role that involves the handling of accounts, money or sensitive data and want to minimise any risk to your business. 

  • Identity Check - An Identity Check is an identity verification process which compares a candidate’s information in order to provide a score that indicates a level of assurance that the candidate is who they claim to be. Ensuring that you are using Identity Checks within your business means that you are complying with Anti-Money Laundering (AML) rules whilst addressing risks associated with fraud, further strengthening the reputation of your business.

  • Santions Check - A Sanctions Check provides a screening on potentially high-risk candidates, particularly necessary for those applying to work in roles within the financial sector, or roles that handle money or sensitive information. Assessing the risks when employing a candidate by getting a Sanctions Check should be an essential step taken throughout any recruitment process, however, within some sectors, having a Sanctions Check is obligatory to perform the job role.

  • Media Check - A Media Check is a check obtained from a market-leading database to uncover any articles or online publications related to your candidate’s full name. Uncovering articles related to your candidate may reveal any positive or negative background history that is posted about them online.

For more information on our background checks please click here or please speak to a member of our team on 01254 355 688 or [email protected]