Expert Investigations

This Q&A-style article on theft, fraud and dishonest employees explores how these things manifest in non-retail environments, why it’s often overlooked, and what business leaders should be doing to protect their organisations.

Fraud and employee dishonesty are risks that many companies underestimate—until it’s too late. While cybercrime dominates the headlines, internal fraud and theft are the quieter, more insidious threats that can bleed a business dry from within.

How prevalent is fraud in non-retail environments?

Fraud is widespread across all sectors, not just retail. Over 23 years investigating employee dishonesty, I’ve personally encountered fraud in manufacturing, logistics, healthcare, utilities, transport, professional services, and many more.

According to the ACFE Report to the Nations 2022, internal asset misappropriation fraud is most commonly found in:

However, these statistics only reflect reported and discovered cases. Much fraud goes unnoticed, unreported, or un-investigated. In my view, we don’t yet grasp the true scale of internal fraud, largely because so much of it remains hidden.

Has the current economic climate made things worse?

Possibly—but not conclusively. While no formal data links economic hardship to increased fraud, it’s a logical assumption that financial pressure can drive some individuals to dishonest acts. Especially when they’re intent on maintaining a particular lifestyle, some employees may choose fraud over personal sacrifice. While this is speculative, I believe we’ll see more of this behaviour emerge.

Where do the fraud opportunities lie in corporate environments?

Fraud often arises when employees identify and exploit weaknesses in internal systems. Whether controls are absent, inadequate, or easily overridden, the door is left open.

The most common departments where fraud occurs include:

These departments typically offer more opportunities to manipulate financial data, authorise payments, or move assets without immediate detection. When more than one employee is involved, detection takes longer and financial losses increase.

Despite advances in technology, most frauds are surprisingly basic—and avoidable. It’s the failure to address risks at a strategic level that enables them.

Are businesses partly to blame?

Yes. The ACFE consistently reports that in nearly half of fraud cases, the company either lacked proper controls (29%) or had systems that were actively overridden (20%).

Businesses often focus on cyber security and physical crime prevention (e.g., CCTV, locks, alarms) while neglecting internal dishonesty. Fraud and employee theft rarely feature as a standing boardroom topic—until after a damaging incident occurs.

This is a short-sighted approach. Too often I’ve heard excuses like, “We’re a family business,” or “We trust our staff,” only to see those same businesses become victims of internal fraud.

How are frauds typically discovered?

According to the ACFE 2022 report:

Other sources include suppliers, subcontractors, and even neighbours. These informal reports are critical and should never be ignored.

Is there such a thing as a ‘typical’ fraudster?

Not really. Fraudsters don’t fit a single profile. The ACFE’s analysis of over 2,000 cases in 113 countries provides little insight into common characteristics, especially within the UK.

Fraud can be committed by anyone—directors, junior staff, volunteers. It’s more about opportunity and motive than personality.

What impact does fraud have on a business?

The effects vary widely. I’ve seen:

The emotional toll on business owners and teams is significant. Trust is broken, morale drops, and reputations are hard to rebuild.

What advice would you give to business leaders?

1. Prevention is better than cure.
Proving dishonesty post-event is difficult. Many cases are handled internally and quietly, allowing the issue to repeat elsewhere.

2. Don’t be naïve.
Assume fraud can happen to your business—then act accordingly.

3. Take a structured approach:

4. Act fast.
If you suspect fraud, investigate immediately. Evidence is perishable. Bring in professional help—there’s no shame in doing so.

5. Have a plan.
Prepare for the possibility of fraud with response protocols, reporting routes, and legal consultation. Don’t wait until you’re in the middle of a crisis.

Conclusion

Fraud isn’t just a possibility—it’s a probability for many businesses. The key is recognising that the threat can come from within. By shifting from reactive to proactive, leaders can drastically reduce their risk exposure and protect their people, their profits, and their reputation. For more information, get in touch with the experts.