August 15, 2008

Employee fraud is a major issue in the United States. The term ‘fraud,’ in this case, stands for anything from property theft to misrepresentation to complicated legal schemes. The Association of Certified Fraud Examiners released a report in 2006 entitled, “The Report to the Nation on Occupational Fraud and Abuse.” This report is a reminder of the value of comprehensive employee screening.

A few key numbers from the ACFE’ 2006 report:

-  The median loss caused my occupational fraud was $159,000.

-  It was estimated that occupational fraud could account for up to $652 billion in losses for US organizations in the year 2006.

-  Small businesses of 100 employees or less suffered disproportionate losses in fraud schemes, with an average of $190,000.

-  Of all the types of occupational fraud that were reported, 91.5% were asset misappropriation frauds.

There are no guarantees when it comes to occupational fraud. Even with an employment background check system in place, it may be possible for your company to become the victim of fraud. However, employee screening is still very important in reducing the likelihood of becoming a victim.

Employee screening will also help insulate a company from liability for large negligent hiring lawsuits that are often filed against employers when employee fraud occurs. In many of these cases the company has no knowledge of any wrongdoing, but failed to be diligent during the hiring process. Therefore, the company is held liable for the actions of their employee(s) who were involved in the fraud.

Contact Employer’s Reference Source Northwest today for information on how to improve your employee screening process and help protect your company from fraud.

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