HR Steps to Counteract Fraud in Your Company


Fraud is a complex criminal threat that presses heavily on the mind of every business. Important companies with a lot to protect always set up sophisticated systems to stop outside attacks. Some of the worries include, loss of intellectual property, loss of customer data, unauthorised transactions, money laundering, and corrupt payments.

Often fraud is committed on the inside, where the individual or group knows the internal weaknesses and how to exploit them. This kind of threat can come from any level of the company, and here’s where the Human Resources department is a security firewall that can help protect the business from fraud. The highest echelons are most likely to slip through the net, due to their standing and position, but fraud can come from anyone.

Nip It In The Bud

The HR department is in an advantageous position to spot potential threats to the company. In fact, this process can start early, during the interviewing stage. A CV must be vetted extensively before an employee is hired. It’s important to check references and weed out any lies. Of course, most people pretty up the truth, and that’s hardly worth a dismissal, but outright lies should be considered a warning signal for potential fraudsters.

CV-padding was reported 109 times in the first half of 2012. HR departments should also be looking at unexplained gaps in the CV history. If someone is prepared to lie to you already, can you really trust them to work at your company? Always check out their qualifications. Study a CV with scepticism.

Business Fraud

Fraud can happen to any company of any reputation. It jeopardises the long-term health of your business, so it’s certainly worth taking action. Take the time to assess where you could be at risk of fraud. Fraud affects one in four small businesses every year, so it’s more common than you think.

Know your customers. Fraud can come from them too. Although many of your customers will have a strong moral compass, others will try to fleece you if they can. Fraudsters can easily pose as customers and attempt to deceive you. Take the time to assess your customer’s profile and question the transaction they wish to make. Common sense is often the way forward. Visit Burton Copeland’s money laundering page for more information on how to handle this situation, if you’re at a loss.

Watch out for suspicious orders. They can be strange purchasing patterns, lack of interest in the product, questionable delivery requests, a payment in excess of the product price, or requests to bypass your usual process. All of these actions can be perfectly innocent, but it’s worth exercising extra caution, just in case.

When in doubt, gather as much information as possible about the customer, to check that they are legitimate. If there is any doubt about the validity of the transaction, don’t go forward. It’s better to be safe than sorry.