Hard Times & Employee Fraud

Earlier this year, an analysis of frauds recorded on the UK's Fraud Prevention Service Staff Fraud Database revealed an increase in the level of fraud committed by employees in 2011. This was reported "In Brief" at the time in the Institute of Credit Management Magazine under the title "Shifty Staff".

I have to say that I took exception to the title "Shifty Staff" - and that I found that "In Brief" didn't do the subject justice.

Certainly, "In Brief" stated, quite rightly, that whilst SME's are aware of the danger of customer fraud, they are reluctant to recognise the risk of fraud on the part of staff - people they believe they know well. Sadly, "In Brief" was too brief to take account of the fact that hard times increase the temptation to steal, or give advice as to how to minimise the risk and remove the temptation.

Some time ago, I wrote quite a long article about fraud and how to avoid falling victim to it - and you can find it at top right on the menu of this blog under the title "Look Out For Fraud". It isn't a perfect recipe for avoiding fraud, but it may give you something to think about and some ideas as to how to minimise risk and remove temptation.

In the meantime, please bear in mind that two thirds of all employee fraud is motivated by debt, gambling, or need. "Shifty" is not quite the word to describe people in the grip of those forces.

SMEs are not social workers and have neither the time nor the resources to help staff deal with the problems that might drive them to steal, but information as to how to deal with debt in particular is freely available - and there is no reason why those resources should not be made available in the office. Even if it means posting notices in the lavatories.