Internal staff fraud continues to rise

The UK Fraud Prevention Service (CIFAS) have released a report detailing the reasons behind a 43% increase in staff fraud.

CIFAS pointed to the economic and employment challenges facing many in the UK as catalysts for a 22% increase in dishonest actions by staff to obtain benefit. This included cash being stolen from customers, up 26% in 2012 compared with 2011, and the manipulation of systems in order to beat targets or obtain benefits for account holders which accounted for 15% of all such dishonest action frauds recorded in 2012.

There was a staggering 106% increase in the number of fraudulent job applications that were spotted and prevented before employment commenced. Despite showing that good work has been done to recognise these, the issue prevents an increasing challenge for organisations to overcome.

Another large increase was in successful applications for employment that were subsequently found to have contained fraudulent declarations. These were up 89%.

CIFAS points to the theft of customer data for personal use as one of the biggest challenges for the future. This was up by 18% in 2012. This data frequently gets passed to criminal sources (who can then make use of this data for their own fraudulent purposes such as emptying a customer’s account of money.

They say that restricting staff access to data or systems that can transfer consumer data outside an organisation are likely to become two of the key areas of attention in the future.

CIFAS Communications Manager, Richard Hurley, said: “Staff Fraud is a complex subject, and while it occurs less than many other frauds (such as identity fraud), its effects are just as damaging.

“Fraud inside an organisation affects customers, the employer and colleagues. It is damaging in terms of finance, reputation and morale.“

Arjun Medhi, CIFAS Staff Fraud Expert, added: “In battling staff fraud, care must be taken not to penalise the vast majority of honest, trustworthy staff.

“But organisations must no longer shy away from their responsibilities. Data sharing is one way of helping to prevent insider fraud from thriving and it can also help to reveal endemic weaknesses that need to be addressed.

“It is only by doing so that an organisation will be able to maintain a healthy, honest, culture of integrity and zero-tolerance towards fraud and corruption.”

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