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Dealing With Suspected Fraud In Your Company

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No one ever likes to think that there’s a chance that fraudulent activity could be taking place in their business. There are many reasons why employees turn bad, and most of them have nothing to do with the company. Changes in personal circumstances and mental health issues are mostly the cause of uncharacteristic criminal deception.

Common Causes for Employee Fraud

What are some causes that pressure employees to go against their natural instincts and attempt to steal from their employer?

Change in financial circumstances

Getting into debt where the repayments exceed the income is the most common motivation for employee fraud.

How did they get there? Access to much credit catches a lot of people out, and now there is also the BNPL (buy now pay later) scheme that traps many people who have poor self-control and a lack of budgeting skills.

Family or peer pressure

Encouragement from family or friends to defraud the company is another cause, and when the truth comes to light, the person pressuring the offender to act illegally can also be charged with a crime.

Disgruntled employee

Maybe the employee was overlooked for a promotion or failed to get a pay rise. Or their boss no longer is as supportive. When an employee feels wronged, the divide between what’s right and what’s wrong is blurry. A defense for the act of fraud may be pleading insanity.

Unfortunately, fraud is a difficult issue to deal with. You can’t just accuse someone of it if you’ve got no proof. There are a few steps that you must take to deal with the situation properly.

Steps To Take When You Suspect Employee Fraud:

1. Gather Evidence

Firstly, you need to ensure you have enough evidence to go on. If you’re confident that fraudulent activity is taking place, take measures to get what you need. This could include putting recording devices around the building to track fraudulent activity. You need to do whatever you can to gather that evidence. Don’t be tempted to let your emotions get the better of you and accuse someone without the proof you need.

2. Seek Expert Help

If someone is going to commit fraud, you can bet that they will do it very carefully. You might not be able to gather the evidence you need without seeking additional help.

3. Confront The Accused

Once you’ve gathered the evidence you need, it’s time to confront the perpetrator. Don’t be surprised if they deny all involvement. In this case, show them the concrete evidence you have. You need to make sure they can’t worm their way out of the situation. This is why we reiterated the importance of gathering evidence before making any accusations earlier.

4. Find Out The Reasons Behind It

As tempting as it will be to dismiss the employee and even take legal action, you need to find all the facts. Talk to them and try and determine their reasons for doing this. If it was a negative thing, by all means, consider their dismissal and take them to court.

You might actually find that they have serious financial difficulties or problems with their family. It will be challenging to find a reason to keep them employed, but make sure you understand why it happened before you jump to a decision.

5. Take Action

Now it’s time to take the final action against the fraudster and determine their fate. In most cases, this will result in dismissal. If the fraudulent activities are particularly devastating, you will have to settle the matter in court. You might even find that their actions weren’t bad after all, and they can get away with a warning. However, be careful doing this as you can’t allow your other employees to know that this sort of thing will be tolerated.

Summing Up

Employee fraud is not completely preventable, but you can take steps to prevent it, including:

  • IT Security – take all systems security measures seriously
  • HR hiring – delve deeper into understanding the prospective employees’ credit rating

Fraud is a horrible thing, and it can have devastating effects. Always be aware of what’s going on in your company, and you should be able to spot anything before it becomes a severe problem. Hopefully, you’ll never have to deal with this sort of thing.