Employee fraud ‘cost East firms £6.3m last year’, data reveals
PUBLISHED: 08:36 20 September 2017 | UPDATED: 08:36 20 September 2017
Corporate employee fraud cost businesses in the East of England more than £6.3m last year, according to new data.
Information obtained by audit firm RSM under the Freedom of Information Act revealed the region’s firms submitted 76 reports to the police about employee fraud in 2016-17.
Nationally, losses from employee fraud amounted to more than £40m, according to the data from ActionFraud, the UK’s national fraud and cyber-crime reporting centre,
Verified losses in the Essex police area amounted to £4.4m from 28 incidents, putting it third in the table, after Metropolitan and City of London. Suffolk lost more than £9,000 from four fraud incidents, and Norfolk lost more than £3,000 from one incident, while Cambridgeshire lost nearly £1.1m from 18 incidents.
Internal or employee frauds occur when fraud is committed against the company or organisation a person is working for. They can include payment fraud, procurement fraud, travel and subsistence fraud, exploiting assets and information or receipt fraud.
According to recent research from CIFAS, a not-for-profit fraud prevention membership organisation, almost half (47%) of internal frauds are discovered as a result of internal controls and audit. However, a growing number are coming to light as a result of staff raising concerns with line managers, or via whistleblowing channels.
RSM forensic partner Akhlaq Ahmed said: “The levels of reported employee fraud and the resulting losses are already high, but this is likely to be the tip of the iceberg. Sadly, a great deal of employee fraud goes unnoticed and unreported, and businesses are simply not doing enough to prevent losses.
“Understandably, employers want to demonstrate that they trust staff to carry out their duties, but there is a balance to be struck by making sure that sensible and effective oversight and controls are in place to prevent abuse.
“In our experience, fraud is often carried out by employees who may have been in post for some time and who know where the weak points are.
“They can often be motivated by greed, lifestyle aspirations, debts or addictions.
“To counteract the threat, companies should take proactive measures to monitor payments.”