Do you know where your business revenue is going?

Okay, so you would certainly notice if you lost £40 million in revenue. It is a lot of money to lose! Well a statement by CIPD states businesses reported more than £40m in losses from employee fraud last year (2016). Employment fraud is unfortunately on the rise and it is down to employers to know the top tips of how to prevent it and what to look out for. See my previous blog on employment theft for those tips, or get yourself on my bulletin list!

I will keep talking about this subject as it is something which isn’t going to go away and where private investigators are becoming more frequently used. This could be down to cuts from the police and not being able to deal with the cases. However, as a private investigator we have the resources to carry out undercover investigations and surveillance to provide the evidence businesses need to dismiss the employee and takes steps to retrieve the money they have lost.

The data, which was obtained by an accountancy firm RSM under a freedom of information request, also showed that employers reported more than 800 incidences of frauds from inside their organisation in 2016-17. Employee frauds include falsifying claims for travel and subsistence, creating bogus customer records or simply stealing cash. Akhlaq Ahmed, forensic partner at RSM, warned that the figures were likely just the “tip of the iceberg”, because a lot of employee fraud goes unnoticed.

All businesses should have a ‘whistleblowing’ policy in place so ensure their employees feel comfortable when raising genuine concerns about other employees. The workforce of any business spends a lot of time with one another and will be the first people to highlight any employment theft or fraud. They are your key investigators as they are trusted within the workforce.

Emma Ahmed, professional support lawyer in the employment team at Hill Dickinson, warned: “The most serious and damaging employee frauds are often committed by longstanding senior employees who abuse their position of trust in the business and treat the company’s cash as their own. Such frauds are often extensive and can run into hundreds of thousands of pounds.”

Research by not-for-profit fraud prevention organisation Credit Industry Fraud Avoidance System, published in May, revealed that almost half (47 per cent) of insider frauds were uncovered by internal controls and auditing, while a fifth (17 per cent) were thwarted by line managers or whistleblowing.

All businesses must know their employees as much as possible and ensure they have the correct policies in place to deal with employment fraud. It will never be eradicated completely but it is about how your business manages it and prevents further incidents. If you want to discuss your current processes in more detail give us a call to arrange a risk consultation.

Author: Charlotte Thornber – Founder of Taylor Investigations