The UK’s fraud prevention service CIFAS and the Chartered Institute of Personnel and Development (CIPD) have launched a free guide to help HR professionals manage the risks associated with fraud.
The Tackling Staff Fraud and Dishonesty: managing and mitigating the risks handbook offers advice on the nature of staff fraud, vetting and security screening and policy making.
John Hinds, policy and projects manager at CIFAS and co-author of the guide, said: “The majority of staff within any organisation are trustworthy and honest. But businesses are now beginning to understand the scale of the threat posed by the small proportion of staff who act dishonestly and defraud their employer.
“CIFAS research shows that staff fraud can have a negative impact on businesses in terms of their reputation, costs and customer service,” Hinds added. “As a result, staff fraud is now emerging as the single most significant fraud risk both to the financial services industry and to businesses handling financial transactions. It is also a serious risk to all businesses.”
Ben Willmott, CIPD employee relations adviser and co-author of the guide, said HR professionals had a fundamental role to play in combating fraud in the workplace. “Employers should adopt a risk-based approach to managing employee fraud and dishonesty which is appropriate to the organisation, the industry sector and different job roles.
“While it might make sense to check whether prospective staff have county court judgments against them for unpaid debts before employing them in certain jobs, such as a call centre that handles credit card transactions, it would be inappropriate to make this a recruitment condition for the majority of jobs or occupations.
“A balanced approach is required to manage the risks while maintaining employees’ trust. This applies to the delivery of staff training and awareness about fraud; monitoring employees to manage risks associated with fraud; and encouraging and investigating reports of fraudulent activities,” Willmott said.
Employers should aim to create a rigorous internal anti-fraud culture that promotes honesty, openness, integrity and vigilance throughout the workforce, Hinds said.
CIFAS is a not-for-profit organisation with about 250 members. It is dedicated to the prevention of financial crime.
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