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According to research, your Company faces a higher risk from employee fraud than they do from external fraud.

Internal fraud occurs when a member of staff or applicant makes false representation, wrongfully fails to disclose information, abuses a position of trust for personal gain or causes loss to others. This can range from compromising customer or payroll data to inflating expenses and theft. Sometimes it's an unplanned, opportunistic attack purely for personal or financial gain but sometimes it's linked to a serious and organised criminal network, even terrorist financing.

During the recruitment process, did you know that by your applicants misrepresenting themselves can be a criminal offence? There are several relevant sections of the Fraud Act 2006. For example, under the terms of Section 2, it is an offence to make a false representation with the intention of making a personal gain, causing a loss to someone else or exposing someone else to the risk of a loss. A representation is false if the person making it knows that it is, or might be untrue or misleading. When someone lies on an application form, CV, or presents a fake certificate but presents the information as real, they have committed fraud and can be prosecuted. It could result in a prison sentence of up to ten years.

Now consider that an estimated 58% of CVs contain discrepancies - that's a huge number of instances of fraud. In reality many go undetected and instances of prosecutions are rare as most employers will understandably let it go unreported. However, it's vitally important to your business that you seek out these fraudsters and ensure you're not offering them a position in your Company.

So, what can you do? The best way to avoid a fraudster from hitting you hard is to know who the fraudster is in the first place. Conducting background screening highlights CV or application misrepresentations and protects your business.

Here are some of the things you should be checking before you consider letting anyone into your business.

Identity Check

Identity theft is rising by over 50% year on year. It is imperative for organisations to ensure that the applicant they are hiring/interacting with are who they claim to be and whether your candidate is being honest with basic and personal information.

An identity check is also the foundation of other background checks, providing essential information needed to move forward with other searches.

Employment Verification

To secure jobs in this ever competitive market, employment information can sometimes be changed and periods of bad or short employment glossed over. Although the value of reference is a hotly debated topic, the reality is that it's still the best way to check the basis on which you are recruiting the applicant (job experience for example) are valid. In an employment check, past employers are contacted for the applicant to check details such as job title, dates, reasons for leaving and to establish that they worked there. In certain regulated industries, it's also a requirement to request specific regulated references.

Education Check

The use of a fake diploma that shows forged educational qualifications are increasing at a phenomenal rate. Research shows that education is the most likely area of a CV to be incorrect, anywhere from changing a 2:2 to a 2:1 to totally fictitious qualifications often backed up with genuine looking certificates.

As a part of screening, it's important to contact the institution or university issuing the certificate or degree to verify the applicant's educational information.

CV Validation

The first step in identifying a prospective employee is their CV and this is used throughout the recruitment process by HR and the hiring manager. It's possible the information the applicant gives on their CV is different to what they enter in the background checking process. As part of the screening process, you should check the information on the CV against the information you are screening them against. This can highlight the inaccuracies and gaps that weren't shown on the CV.

Criminal Check

It's a company's responsibility to create a safe working environment whilst protecting their customers, shareholders and general business interests. As the first line of defence, businesses want to ensure the applicant they recruit has disclosed all relevant criminal convictions. The days of relying on a box on the application form asking the applicant to honestly tell you about their criminal conviction is a thing of the past.

 A common mistake employers make is to assume that criminal record checks are only for those working with children or vulnerable adults. This is not the case. The UK has different levels of criminal record checks so there is one suitable for all companies and all roles.

Credit Check.  Credit checks only show publicly available information such as CCJ's, Bankruptcies, IVA's and so on.  In the financial sector this is an important check. Outside of that, it can go a long way to establishing the integrity of an applicant. Of course any background check should be carried out in relation to the risk and relevance to the role you're recruiting for.

Matt Armstrong - Managing Director, Giant Group

Practical HR and Giant Screening work in Partnership to bring clients the very best in employment screening and on-boarding. 

For more information please call 01702 216573.