Employee fraud is increasing – Is your business covered?

Staff fraud is growing at up to 79%

With new figures showing the extent of employee fraud in the UK, commercial insurance experts are asking entrepreneurs to consider whether their policies adequately protect them from all the risks exposed to their businesses.

CIFAS – the UK’s Fraud Prevention Service – has released figures which confirm cases of fraud committed by staff within the employer organisations rose by 14.5% in 2011 compared to the previous year. There was also a 41% hike in the number of dishonest actions by staff to gain benefit by theft or deception including the theft of cash from the customer (31% of cases) and from the employer (23%).

The current economic climate and the financial pressures it has brought have been blamed for the rise and the situation doesn’t look as if it is going to improve any time soon. Senior counter fraud specialists are warning businesses to expect this type of fraud to pose the biggest danger to organisations in the future.

The figures, unveiled in the Staff Fraudscape report, show internal controls and monitoring were the main ways in which staff frauds were discovered in 2011 (44% of cases).

CIFAS Communications Manager, Richard Hurley, said: “It is well known that economic and personal circumstances lead some staff to commit fraud against their employer. Equally, the links between insider fraud and organised criminal networks have been demonstrated previously by CIFAS.

What Staff Fraudscape reveals, however, are the many nuances – from a 79% increase in staff manipulating details of a customer account (frequently to help family or friends who are in financial difficulties) through to a 59% decrease in staff stealing personal data for their own use – indicating, therefore, a higher level of criminal involvement.

While the general catalysts for staff fraud remain well known, Staff Fraudscape helps to clarify the range of issues – thereby providing better intelligence and counter fraud insights directly as a result of the data sharing efforts of CIFAS Members.”

Reacting to the research, David Hudson, Managing Director of leading Manchester commercial insurance brokers Buckland Harvester, said: “Employee fraud is a growing issue affecting UK businesses and is likely to continue increasing while the economy stagnates and times are tough. However, it’s often a problem overlooked by companies when it comes to taking out business insurance and as a result, many find themselves without cover if the worst happens.

“There are specialist insurance products which can protect businesses when it comes to employee fraud where money is actually stolen and it’s worth seeking professional advice about how best to achieve this”.

If you are concerned about any sort of fraud within your workforce please contact Buckland Harvester directly via www.bucklandharvester.co.uk