Data Protection Act can limit staff fraud

HR directors have been urged to use the Data Protection Act (DPA) to reduce the risk of hiring serial fraudsters.


The recommendation by Arjun Medhi, staff fraud adviser at CIFAS – the UK’s Fraud Prevention Service – comes as a new CIFAS report showed a spike in the number of insider fraud cases.


Dishonest actions by staff such as the falsification of expenses or time sheets have shot up by a staggering 69% in the first half of 2009 compared with the last half of 2008 – indicating that fraud is directly linked with the recession.


Medhi told Personnel Today that employers should work with competitors to share data, in line with data protection rules, to avoid being stung by fraudsters.


He said: “[By having] data-sharing capabilities, they can identify [a fraudster] and not hire that person. In HR you may see lots of people hide behind the DPA. In this case you can use it to your advantage. This [DPA] acts as a deterrent. We’ve seen reductions in frauds committed by opportunists.”


He added organisations should work together to share good practice, and urged employers to conduct the screening of current employees either through internet or credit checks.


CIFAS chief executive Peter Hurst added: “While it remains true that most employees are completely trustworthy, these figures do show that the impact of the current recession has been severe.


“Desperate times do, indeed, lead to desperate measures, and businesses need to put in place all possible controls to ensure that they, their employees and customers are not subjected to fraud risks that can be avoided.”


CIFAS analysed staff frauds filed between July 2008 and June 2009.

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