The growing threat of internal fraud
26th August 2010
CIFAS, the UK’s Fraud Prevention Service, in collaboration with a number of private and public sector bodies and experts, has released a report entitled ‘The Internal Betrayal: A CIFAS Report of Beating the Growing Threat of Staff Fraud’.
This report noted a 45% increase in the number of cases of fraud committed by employees, compared with 2008.
In 2010, a projected increase of 62% is anticipated in the number of cases of staff unlawfully obtaining or disclosing personal data, and this figure just includes internal fraud that is recorded and proven.
Organisations are becoming increasingly aware of the threat from within and with statistics showing this problem is increasing, organisations need to look at ways to effectively prevent these frauds to limit reputational damage and financial fallout.
General controls suggested by CIFAS include:
- Education and training – security awareness programme
- Professional investigative capability and well publicised deterrent
- Fraud and theft detection
- Communication and intelligence
- Audit trails, logs and reconciliation’s
- Monitoring and exiting of high risk posts
- Segregation and compartmentalisation
- Access (logical and physical) controls
- Information classification and protection
- Foster good industrial relations
- Realistic target programmes
- Duty to report
An understanding of why internal fraud is committed is also beneficial in tackling the problem. The three major fields of motivation include greed, need and a miscellaneous group including revenge, competitive sabotage, peer pressure, or excitement.
It is impossible to prevent every fraud, therefore if internal fraud is detected then forensic specialists should be used to ensure the evidence is preserved correctly and admissible in court should a case be brought against an employee – after all, every action leaves a fingerprint and digital fingerprints may provide indisputable evidence.