Employee fraud rises as credit crunch hits

Fraud experts and business groups have put employers on red alert as the economic downturn forces many workers to find extra cash dishonestly.

Recent figures from accountancy firm BDO Stoy Hayward showed that employee fraud has cost UK companies more than £77m in the first half of this year – up from just £10m in the same period last year.

Simon Bevan, head of fraud services at Stoy Hayward, said spiralling personal debt as a result of mortgage, food and fuel price hikes was making workers desperate.

“Sadly, commercial organisations throughout the UK are currently failing, in some cases quite spectacularly, to get to grips with the fraudulent activity of their staff,” he added.

Ronnie Ludwig, partner at chartered accountants Saffery Champness, called for employers to be extra alert.

“Staff scamming expense claims, or lifting company stock, software or equipment for resale, can be damaging, and we advise increased vigilance,” he said.

Employers can reduce the risk of being hit by staff fraud by monitoring worker habits, said Richard Davies, deputy chairman of the Insurance Fraud Bureau.

“Employers need to watch out for changes in lifestyle and work patterns, and keep an eye on people who are working very early or very late when they wouldn’t ordinarily do so, or not taking lunch breaks or holidays as they ordinarily would,” said Davies.

Last year, advisory firm Deloitte’s Global Financial Services Security Survey found that 91% of employers were concerned about the risks of internal fraud.

Employer groups welcomed the calls for action.

Gareth Elliott, policy adviser at the British Chambers of Commerce, said: “In times of economic uncertainty, it is important that all businesses are wary and vigilant of employee fraud.”

Comments are closed.