Commercial Investigations

The cash flow of nearly a quarter of UK small businesses is under threat from losses due to staff theft or fraud. The findings from a UK-wide survey for Bank of Scotland Business Banking by the Opinion Research Business, reveal that 24% of Small and Medium-sized Enterprises (SMEs) - almost 900,000 across the UK - report having suffered staff fraud. Two per cent of businesses identify staff fraud as being a "frequent" problem for their businesses. Perhaps not surprisingly, companies with more staff have greater problems. Whilst 19% of firms with fewer than 15 employees have experienced staff fraud, this figure more than doubles to 48% for businesses with over 36 staff. Interestingly, firms headed by men are more likely to experience staff fraud than those headed by women (25% compared with 18%).

Types of Employee Fraud Activity The workshop discussion groups revealed that employee frauds include a wide range of activity varying from straightforward theft, obtaining property by deception, data security breaches, breach of confidentiality and conspiracy, to attempts to obtain a pecuniary advantage by deception. Some typical examples included:

Example 1 - An application for employment contains material falsehoods. The applicant claims to have just returned to the UK after a gap year travelling overseas. Investigation reveals the employee was working in the UK during the previous 12 months and was dismissed for misconduct - for fraud. Other scenarios could include qualifications not held, a false employment history, a false reference or use of a false identity.

Example 2 - A bank call centre clerk reports they have seen another employee print some confidential customer data and place it in their bag. Investigation reveals the employee had been offered money for the information while out for lunch one day in the bank's uniform.

Example 3 - A staff member is overheard on their mobile phone in a toilet cubicle, telling someone the security details for a specific customer's account, enabling the third party to empty the account of money.

Theft or misuse of data for use in identity fraud and impersonation featured highly throughout the research. Other employee frauds included:

• Misappropriation of funds
• Theft of cheques
• Over-riding decline decisions so as to open accounts for family and friends
• Inflating expense claims
• Pretending relatives have died to take bereavement leave
• Forging signatures
• Removing money from customer accounts
• Falsifying documents
• Selling company assets at below their true value in return for payment