The Dos And Donts When It Comes To Tackling Workplace Fraud

There are many dos and donts when it comes to fraud. The amount of fraud committed in the UK more than doubled to £2.3bn in 2023, marking the second-biggest year for scams in the last two decades, according to the accounting firm BDO’s latest FraudTrack report, which also found that the number of reported cases rose by 18% to a three-year high, and the number of high-value cases over £50m increased by 60% year-on-year in 2023. Half of the high-value frauds were over £200m. We are facing a growing “epidemic of scams”, so there is every reason to be vigilant within your business.

What Does Fraud in the Workplace Look Like?

Our findings indicate that a typical fraudster is:

• Between the ages of 36 and 55 (69% of fraudsters investigated)
• Predominantly male (79%)
• A threat from within (65% are employed by the company)
• An executive or director level position (35%)
• Employed in the organization for at least six years (38%)
• Described as autocratic (18%) and are three times as likely to be regarded as friendly as not
• Esteemed, describing themselves as well-respected in their organization
• Likely to have colluded with others (62% of frauds, down just slightly from 70% in the 2013 survey)
• Motivated by personal gain (60%), greed (36%) and the sense of ‘because I can’ (27%)

What Can You Do To Stop It – The Dos and Donts of Fraud

We have put together a few dos and donts when considering fraud, but please be aware that this list is not exhaustive:

DO

• Develop and implement a zero-tolerance culture, incorporating an anti-fraud policy and fraud response plan. Clearly communicate it to all employees and review regularly, preferably annually.
• Conduct pre-employment screening before employees start working for you. Consider periodic checks on existing employees in high risk areas.
• Securely destroy all confidential and sensitive business information and wipe all computers and mobile devices before disposal.
• Store confidential or sensitive information in a secure place. Limit access to essential staff.
• Check your companies registered details at Companies House on a regular basis. Register for Web filing, PROOF and Monitor services.
• Review your credit reports for discrepancies on a regular basis.
• Educate staff about fraud prevention and detection as part of their induction and ongoing training.
• Conduct business checks on new and existing business partners, customers, suppliers and third-party service providers, and be alert to changes of ownership or unusual trading patterns of those that you deal with.
• Arrange for your mail to be redirected (for at least a year) if you move premises and notify customers, vendors and other partners of your change of address.
• If you don’t receive any mail check with Royal Mail to ensure a redirection has not been set up in your company’s name without your knowledge.
• Implement a clear desk policy.
• Establish a credible mechanism for staff to report suspicions of fraud.
• Encourage a ‘no blame’ culture where issues can be discussed without repercussions.
• Ensure your IT security policy covers mobile devices, laptop computers, the internet, email and access. Review it on a regular basis.
• Keep computer security software and firewalls up to date.

DON’T

• Assume the information provided by prospective employees is accurate and independently verify it.
• Give employees unlimited access to sensitive information where it is not required.
• Rely solely on information obtained from Companies House when checking a new supplier or customer’s credit history. Use other credible sources.
• Put business bank account details and Directorships into the Public domain (e.g. on your website). It is important to note that signatures will be available on public records if you paper file with Companies House.
• Allow employees to keep written records of business passwords.