Case Studies

Staff fraud database

by msecadm4921

The dangers posed to an organisation by its own staff are, often, not as readily acknowledged when compared with the threat of fraud committed by an outsider. So says the trade body CIFAS, which reports a 52 per cent spike in recorded instances of staff fraud.

 

 

CIFAS Communications Manager, Richard Hurley, says: “Organisations have invested much time and effort in putting controls in place to counter the threat of insider fraud, and these figures demonstrate that this investment is paying off; with more fraud being uncovered. CIFAS has long campaigned for better awareness of the danger of staff fraud, and with more being detected, a clear warning is delivered: without investment in procedures and counter fraud measures, undetected staff fraud will damage your organisation.” 

 

As economic and employment problems persist for many, increases in fraud where staff either try to steal from their employer or its customers or try to defraud their way into employment are not especially surprising.  The dangers that these increases signal, however, should not be ignored.

 

Arjun Medhi, CIFAS Staff Fraud Adviser says: “As people feel the pinch, organisations must be aware that staff are working harder than ever, often for smaller rewards; going without recognition or adequate recompense. This can create resentment and some people will eventually resort to fraud out of a sense of entitlement or misguidedly perceiving no other way to support themselves. If organisations do not keep an eye out for these signs, or indications of staff in financial trouble, then they are leaving the door open for fraudsters. Additionally, the dramatic increases in fraudulent attempts to gain employment might demonstrate improved detection techniques, but they prove that all organisations need to invest in better fraud prevention.”

 

Customer data 

 

Following on from a decrease in the number of staff unlawfully obtaining and disclosing personal data, the first half of 2012 has seen the unwelcome return of this crime: with a 53 per cent increase from the first half of 2011. Richard Hurley adds: “Organisations are aware of this threat, and much effort has been put into trying to prevent employees from stealing data. Evidence points increasingly, however, to networks of individuals joining forces to try and ‘spread the load’ in terms of the theft of data. Consequently, the risk is spread out and criminals can avoid detection by ‘slipping under the radar’ of the counter-theft measures. Organisations simply must keep their counter fraud measures under review and continuously build on them further in order to pre-empt fraudsters’ developing techniques.” 

 

CIFAS Staff Fraud Adviser, Arjun Medhi, adds: “Fraud committed inside an organisation is a threat that is now taken more seriously than ever before, but as techniques and preventative measures evolve, the true scale of the problem becomes clearer. In a challenging environment of constantly developing technologies, economic hard times and a scarcity of employment, organisations who do not take this threat seriously must recognise that the dangers they face in terms of their financial well-being, ability to operate legally and their reputation are immense.”

 

Notes 

 

CIFAS has more than 260 member organisations spread across banking, credit cards, asset finance, retail credit, mail order, insurance, investment management, telecommunications, factoring and share dealing.  Members share information on identified frauds seeking to prevent further fraud. Other schemes modelled on CIFAS have been set up in southern Africa and Germany.

 

About CIFAS 

 

CIFAS launched its Staff Fraud Database in 2006, which currently has 85 Members covering over 236 organisations sharing information on frauds that have been perpetrated against CIFAS members. Members are drawn from UK financial services, but also from telecommunications, insurance, recruitment and other business sectors. The trade group stresses that the launch of the database was carried out in consultation with: the Information Commissioner’s Office, the Financial Services Authority; the Confederation of British Industry; the Trades Union Congress and Chartered Institute for Personnel and Development.

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