CIFAS publishes special report into staff fraud

A new report from the UK's fraud prevention service has shown a worrying increase in the estimated amount of identity fraud by private and public sector employees.

The special report into staff fraud by CIFAS (originally known as the Credit Industry Fraud Avoidance System), The Internal Betrayal, investigates one of the most pertinent issues to employers. The risk of fraudulent acts by employees is one of the key concerns behind employment screening practices - and every organisation faces significant loss of earnings if they do not take steps to combat the threat of staff fraud.

The special report was commissioned when in 2009, CIFAS noted a 45% increase in the number of fraudulent incidents committed by employees. This included a variety of cases, from lies on application forms caught out by a background check service to theft of cash from customers and organisations detected by internal processes.

A particularly worrying trend revealed by the latest report is the rise in the number of cases of identity related fraud from 2007.

The number of detected cases of identity fraud - where someone has attempted to assume the identity of another - has risen from just under 80,000 in 2007 to a projected figure of nearly 120,000 in 2010. This has been in part driven by a rise in the number of cases where a member of staff has fraudulently disclosed the personal details of others to a third party - a rise of 113% in 2009 in comparison with 2008.

With this figure projected to rise by a further 62% by the end of 2010, the threat of internal fraud seems clear - particularly when these figures only account for the number of proven cases across the CIFAS dataset.

Pointing to a 71% increase in the number of fraudulent applications revealed by employment screening research in Europe, the Middle-East and Asia, CIFAS's staff fraud adviser Arjun Medhi warns that no organisation can afford to be complacent about staff fraud.

"Like all crimes, fraud will affect you and your organisation, your competitors, your industry - in essence your community," says Medhi.