| Business fraud is on the up |
| In 2005 a personal assistant at
an investment bank, was convicted of stealing an astonishing £4.3m
from her bosses. Whilst this loss was staggering, it highlighted a
growing problem of commercial fraud and theft by employees. Insurance
cover known as Fidelity Guarantee or Commercial Fraud has been available
for many years but businesses have been reluctant to take out cover
as it seemed to demonstrate a distrust in its staff. However, many
businesses have been forced to go into administration following fraud
by an employee. Specific fraud risks are: Fraudulent diversion of funds
Fraudulently creating and approving purchases
Falsifying either individually or in collusion
with others the financial accounts to enable the payment of salaries
etc
Helping external parties falsify the provision of goods and services
Theft of stock by employees or in collusion with a third party
Theft of your own or client funds
Stealing or forging company cheques.
Recently commissioned research showed directors or senior managers committed almost two thirds of the fraud cases surveyed. A third of all fraud was committed by long standing employees of between 10 and 25 years service. One half was done in collusion with others and men are overwhelmingly more likely to commit fraud than women. Youngsters under 25 make up a very small proportion of perpetrators. There are certain indicators of fraud such as: Certain customers or suppliers dealt with exclusively
by one employee
Personal life style not matching income
Refusal to take holiday entitlement
Mundane tasks retained rather than delegated.
The cost of cover is low and readily available for most businesses. Employee fraud happens in the best run businesses and it seems sensible to protect yourself against a risk that can cause your business to fail. For further information please contact the PoundGates team e-Mail: info@poundgates.com or 01473 216406 Authorised and regulated by the Financial Services Authority |
