FINANCIAL LOSSES FROM STAFF FRAUD

The rate of employee theft, especially in the retail industry, is quite alarming. Employee fraud can occur in any form, from something as little as “forgetting” to swipe a $1.00 transaction to diverting thousands of dollars into a personal account.

 

The main reasons employees typically commit fraud are: Pressure and incentive – The employee may be experiencing financial stress

Opportunity – The employee has access to enough merchandise to feel that they can successfully commit fraud and also conceal it

Rationalization – The employee is able to justify the fraud based on performance or how they are treated at work.

 

Revenue loss as a result of incessant employee fraud is becoming a worrying sign among SME companies.

Employees who co-operate with criminal networks are known to assist in a number of ways. At a basic level, they can facilitate fraudulent transactions or steal cash or other items to order.

 

However, in the financial services industry, approaching staff and persuading them to compromise customer or payroll data to allow third parties to perpetrate identity and other types of fraud represent the greatest area of risk. What level of threat does staff fraud pose? There are four main interconnected areas of threat to consider:

  • Financial losses
  • Reputational damage
  • Regulatory implications
  • Internal impact

Employee Theft Statistics:

The amount stolen annually from U.S. businesses by employees – $50 billion

  • Per cent of annual revenues lost to theft or fraud – 7%
  • Per cent of employees who have stolen at least once from their employer – 75%
  • Per cent of employees who have stolen at least twice from their employer – 37.5%

To learn more download the book now ‘’ Prevent your employees from defrauding your business”

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