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Fraud committed by employees rocketed by over 40% last year, CIFAS reveals

Fraud committed by employees rose by 43% in 2012 compared with the previous year, according to analysis by the UK's fraud prevention service, CIFAS.

The analysis revealed the overall increase in staff fraud is mainly due to a surge in fraudulent attempts to gain employment, such as holding or falsely declaring information such as qualifications or previous convictions. Such cases doubled in 2012.

And attempts to gain benefit by deception or manipulation while in a job (such as stealing cash from customer accounts or employers) increased by 22%.

The number of instances where staff have stolen customer data for personal use has also increased. 

CIFAS communications manager, Richard Hurley, said: "The damage done by fraudsters inside an organisation can impact upon balance sheets, customer confidence and staff morale. It can also lead to regulatory and legal punishments to organisations.

"The 43% increase in staff fraud witnessed in 2012 demonstrates, therefore, that some organisations have invested in better protection and controls - enabling them to identify and prevent more fraud. Some of the frauds, however, demonstrate that organisations remain vulnerable.

"While these types of fraud are thankfully less commonplace than fraud attempts from outside an organisation, the damage that they can cause is as serious, if not more so."

Hurley added: "Economic hardship as a motivation for some fraudsters might generate a level of understanding, but the heartless and exploitative nature of many frauds (many of the instances relate to theft from elderly or vulnerable people's accounts) only underlines the fact that the perpetrators' actions have much in common with muggers in the street. While completely stamping out these kinds of fraud is very difficult, responsible employers can help to do so by sharing data on confirmed cases in order to prevent such fraudsters from simply moving on to another organisation.

"It must also serve as a lesson to organisations to have better support networks in place for staff who are struggling financially, so that they do not turn to committing crime within the organisation."