Analysis of frauds recorded on the CIFAS Staff Fraud Database during the first half of 2012, compared with 2011, shines a new light on the problem of fraud committed by organisational insiders, and reveals several alarming increases:

•A 52% overall increase in the number of insider frauds recorded
•Precarious economic and employment conditions demonstrated by the 24% increase in dishonest actions by staff to gain a benefit, with fraudulent attempts to gain employment more than doubling
•A 53% surge in theft of customer data by an employee.

The dangers posed to an organisation by its own staff are, often, not as readily acknowledged when compared with the threat of fraud committed by an outsider. The 52% spike in recorded instances of staff fraud, therefore, sends a clear warning to organisations.

As economic and employment problems persist for many, increases in fraud where staff either try to steal from their employer or its customers or try to defraud their way into employment are not especially surprising.

"Organisations have invested much time and effort in putting controls in place to counter the threat of insider fraud, and these figures demonstrate that this investment is paying off; with more fraud being uncovered. CIFAS has long campaigned for better awareness of the danger of staff fraud, and with more being detected, a clear warning is delivered: without investment in procedures and counter fraud measures, undetected staff fraud will damage your organisation," says CIFAS communications manager, Richard Hurley.

Arjun Medhi, CIFAS Staff Fraud Adviser notes: "As people feel the pinch, organisations must be aware that staff are working harder than ever, often for smaller rewards; going without recognition or adequate recompense. This can create resentment and some people will eventually resort to fraud out of a sense of entitlement or misguidedly perceiving no other way to support themselves. If organisations do not keep an eye out for these signs, or indications of staff in financial trouble, then they are leaving the door open for fraudsters.

"Additionally, the dramatic increases in fraudulent attempts to gain employment might demonstrate improved detection techniques, but they prove that all organisations need to invest in better fraud prevention."
Following on from a decrease in the number of staff unlawfully obtaining and disclosing personal data, the first half of 2012 has seen the unwelcome return of this crime: with a 53% increase from the first half of 2011. Hurley notes: "Organisations are aware of this threat, and much effort has been put into trying to prevent employees from stealing data. Evidence points increasingly, however, to networks of individuals joining forces to try and 'spread the load' in terms of the theft of data. Consequently, the risk is spread out and criminals can avoid detection by 'slipping under the radar' of the counter-theft measures. Organisations simply must keep their counter fraud measures under review and continuously build on them further in order to pre-empt fraudsters' developing techniques."

CIFAS staff fraud adviser, Arjun Medhi, concludes: "Fraud committed inside an organisation is a threat that is now taken more seriously than ever before, but as techniques and preventative measures evolve, the true scale of the problem becomes clearer. In a challenging environment of constantly developing technologies, economic hard times and a scarcity of employment, organisations who do not take this threat seriously must recognise that the dangers they face in terms of their financial well-being, ability to operate legally and their reputation are immense."

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