Sunday, 15 March 2015

Employee Theft & Fraud

Employee theft and fraud can affect any type or size of business such as; corporate or professional, small business, service provider, retail, restaurant, or grocer.

AREAS of employee theft and fraud:
  • Embezzlement
  • Property
  • Merchandise
  • Cash
  • Time
  • Illness & injury benefits
  • Identity or credit card information
  • Proprietary Information
SIGNS of employee theft and fraud:
  • Retail business with shrinkage rates higher than 1.04% (Canada)
  • Cash drawers being out or accounts that don’t reconcile
  • Your competition inexplicably seems to have insider knowledge of your business
  • Unexplained increased costs
  • Increase in medical claims & sick days
  • Customer complaints regarding unauthorized charges to credit cards
  • Any sign of surreptitious audio recording or unauthorized computer program installations, downloads, or log ins
SIGNS that may point to a specific employee
  • Disgruntled, resentful, or un-invested behaviour or comments
  • Evasive response or unlikely explanations when asked about inconsistencies
  • Indicators of substance abuse. Habits require money & often result in absence
  • Arriving late, leaving early, & long lunches
  • Refusal to take vacation days (their scheme may require them to make regular, manual entries to keep it from being discovered)
  • Living beyond one’s means
  • Repeated injuries and compensation claims
  • Suspicion that an injury may not have occurred at work, as claimed
  • Customer comments about inconsistent pricing or discounts for cash purchases offered by a certain employee
  • Comments by other employees
  • Employee being in an area where (or when) they have no legitimate reason to be
How to prevent employee theft and fraud:
Even though it cannot be prevented entirely, there are steps you can take to protect your business, profits, intellectual property, and even other employees. Hiring practices and proper training are key.
  • Conduct BACKGROUND CHECKS, including criminal convictions
  • Confirm references and resume claims. Some hiring policies may include drug screening or credit checks. Consult your lawyer(s) to ensure that you are acting within the law.
  • Businesses with a high percentage of minimum wage, non-permanent, employees may see higher rates of credit card skimming and identity theft yet, due to the nature of the employment, resumes are scrutinized and verified the least.
  • Create & implement clear, comprehensive, policies & training practices
  • Create a positive work environment where staff are paid fairly, feel appreciated, and are rewarded (praise, bonuses). Numerous studies have shown that employees who feel valued and appreciated are more loyal and less likely to steal or commit fraud.
  • Reduce opportunity. This may be as simple as locking an office door, installing cameras, or changing passwords or login procedure.
Increasing your company’s protection against theft and fraud may take an investment of time, effort, and expense; (particularly when implementing new policy & procedure) but the benefits of doing so far outweigh the costs