Employee fraud on the increase

Johannesburg - In tough times fraud committed by employees against their companies booms, Alexander Forbes Risk Services said on Monday.

"The best defence against being ripped off by your employees is to remain alert to patterns of behaviour which may point to fraud," spokesperson Brian Gillespie said in a statement.

"And employers shouldn't kid themselves that employees only steal small amounts," he said.

Even large-scale theft starts in a small way with lower to medium-ranked white collar employees usually causing the most damage, he said.

"The employee sees an opportunity and, knowing there's little chance of being found out, steals once and gets away with it.

"After ensuring there are no repercussions the process is repeated."

Gillespie said this could continue for years if the level of theft remained the same.

"For example, 25 years ago a personal assistant at the branch of a financial institution in downtown Johannesburg stole R2m over a period of ten years.

"It was only when she went on leave and someone else had to do her job that the theft was discovered," he said.

Typically most thefts or fraud were only discovered when the perpetrator was not there, he said.

Employee fraud was also often detected through greed because dishonest employees using their ill-gotten gains to improve their lifestyles then found they needed more money to finance their taste for luxury goods, gambling or drug-addiction.

Basic precautions that businesses could take to prevent their employees stealing from or defrauding them included ensuring all cheques or electronic payments required counter signatures or authorisation.

Internal audits should be conducted on a monthly basis and old cheques shredded. Employers should lock away cash and properly control tills.

Gillespie added that employees should be compelled to take a least two consecutive weeks' paid leave each year.

He also suggested that the lifestyles and spending patterns of staff should be monitored.

- Sapa