Tighter staff vetting is key to cutting company fraud

A more rigorous approach to recruitment is the best way to combat employee
fraud, according to a KPMG report.

Employers should ensure they have systems in place to recruit honest and
reliable staff in order to protect themselves. In particular they should follow
up references.

Jeremy Outen, fraud investigation partner at KPMG, said, "The key to
preventing fraud in your organisation is to make sure you recruit the right
people who are trustworthy and will not do damage to your business. One way is
to follow up all the references by speaking to the organisations that provided

"We have seen a number of cases where fraudulent employees have left
with a good reference in order to go quietly."

The research shows that employee fraud rose by 60 per cent in the first six
months of the year. The number of fraud cases going through UK courts involving
sums of more than £100,000 jumped from 32 between January 2000 and June 2000 to
44 for the first six months this year.

The research also shows that the number of fraud cases involving management
has dropped by 7 per cent.

Outen said that although managers remain the most probable perpetrators of
fraud, companies were making progress in the fight against the problem.

He said, "The continuing decline in cases perpetrated by this group
suggests that companies are getting better at detecting and preventing this
type of fraud."

Another survey published in June by PricewaterhouseCoopers revealed that 89
per cent of frauds in UK companies are committed by employees.


By Katie Hawkins

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