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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The Vail Daily newspaper recently published an update to the story of a Vail, CO resort currently involved in a lawsuit. The suit stems from an employment background check that did not do enough to uncover a ski instructor’s criminal background. The ski instructor in question was charged with rape of a 17 years old ski student. The instructor was found not guilty, but the family of the girl now has a lawsuit against the ski resort.

 The lawsuit claims that the resort had advertised that they always ran an employment background check on all their applicants. In fact, the human resources director did run a background check on the instructor in 2004 but it only revealed a glimpse of his criminal past.

During the criminal trial proceedings it was revealed that his criminal rap sheet actually dated back to 1989 and contained numerous arrests. Included on this extended criminal background were arrests made for criminal mischief, car theft and trespassing.

The Vail resort is now trying to prove to the court that it did its due diligence or it faces a multimillion-dollar settlement. The case is yet another reminder of the dangers employers can face when they do not require enough on their employee screening process. As it happened, the employment background check that the resort ran on the instructor only looked back 5 years.

A professional employee screening company will work with a client to prevent a situation like this. In this case of the resort, it was apparent that a more extensive background check was necessary to get a full profile of the ski instructor. Don’t let this happen to your business, invest in a comprehensive employee screening service and reduce your risk.

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Case Study: Dallas Schools Backlogged and Behind

Would you want to know the backgrounds of the people working with your children? The residents of Texas did.  In 2007 as they passed a law that required in-depth background checks for both their current and future employees. This law came on the heels of reports of delayed and incomplete background checks on the part of the Dallas Independent School District.

This particular school district was not keeping up with the employee background check requirements and was backlogged for months. It was also using non-comprehensive databases for the states where the employees had lived.

In today’s world, comprehensive pre-employment screening is vital. Letting screening standards lapse into the state that the Dallas school district did left the children in potentially harmful situations and the district open to legal action.

The passing of the new law in Texas was an acknowledgement that the limited background searches were insufficient to discover the complete backgrounds of school employees. After all, with checks like this, the employee need only leave a suspicious state off the application and their employer would be none the wiser.

The Dallas Independent School District eventually discovered that in their backlogged background checks, numerous employees had undisclosed criminal records that had not been discovered in their limited checks.

If a comprehensive employee background check system had been in place much earlier, the district would not have been employing people with questionable backgrounds. Don’t let potentially harmful employees slip by with an inadequate pre-employment screening practice.  Consult with a qualified employee background check provider to guarantee that due diligence will be exercised.

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