Fraud committed by employees ‘significant threat’ to businesses

New figures released by the Fraud Prevention Service show that there was a 52 per cent increase in fraud committed by workers in the first half of 2012, with precarious employment conditions thought to be the main reason for the increase.

David Ransom, director of the Business Crime Reduction Centre, a collaboration between the region’s four police forces and Yorkshire charity People United Against Crime, said staff felt a “misplaced sense of entitlement”, leading to theft.

Owners of businesses across Yorkshire who are concerned about the effect of employee fraud on the long-term health of their firm are now being encouraged to attend an event next month to find out how to better detect and fight the problem.

Mr Ransom said: “Fraud committed inside a business is a threat that must be taken more seriously than ever before.

“In a challenging environment of constantly developing technologies, economic hard times and a scarcity of employment, small to medium enterprises that do not take this threat seriously must recognise that the dangers they face in terms of their financial well-being, ability to operate legally and their reputation are significant.”

People United Against Crime was first established in 1996 by South Yorkshire Police to advise small businesses on security threats, including fraud, and it operates across North, West and South Yorkshire and the Humberside Police areas.

The Business Crime Reduction Centre is one part of the charity’s work and is funded with £2.2m from the European Union and £2m which has been contributed from the budgets of the four police forces.

Mr Ransom said the centre offered a “one stop shop” for crime reduction advice and used specially-trained police community support officers from all four forces to carry out its work on business crime.

Teams of such officers conduct both physical security surveys of companies by visiting their premises and also check their “cyber security” ratings by examining websites and other possible technological points of serious weakness.

Once a survey is complete, they report any vulnerabilities they have found and make recommendations on how to address them including the introduction of staff policies and procedures in order to reduce threats.

Staff at the BCRC said some 
of the large increase in employee fraud seen this year could be 
explained by the fact that 
some businesses were more able to detect and record such thefts 
that they had been in previous years.

But Mr Ransom said the smaller the firm the bigger the risk and added: “Economic and employment conditions are considered to be part of the reason for the significant increase, with staff working harder, often for smaller rewards.

“This can create a sense of resentment and some people resorting to fraud out of a misplaced sense of entitlement.

“It is believed that without investment in counter-fraud measures, undetected employee fraud has been damaging businesses for many years.”

The centre will host its free event on tackling employee fraud for small and medium-sized enterprises on Wednesday, September 19 at the headquarters of the Humberside Police Authority at Pacific Exchange in Hull.

A spokesman said: “Expert speakers will discuss insider threats, cybercrime attacks, 
identity theft and account takeover.”

To register for the event or to find out more, businesses should log on to the Business Crime Reduction Centre website at 
www.bcrc-uk.org.