Latest news
Sales staff are the best fraudsters
Reported fraud could top £5bn within a couple of years with managers uncovering more theft as they clamp down on costs and cash flow in the recession. The startling amount lost by businesses and the public sector to larger frauds last year is up 76% on 2008 levels. The figures have been collected by BDO, the accountancy firm, which has one of the largest fraud investigation teams. The average value of each fraud is now said to be over £5m compared to £1.8m in 2003.
BDO said the cost of management fraud was up 48% and the best sales staff often turned out to be the "best fraudsters". In the financial sector, fraud was up 70% to £1.34bn, but BDO estimates 90% of larger frauds in the sector are not reported.
According to the survey, most fraudsters are aged 20-39 and the vast majority – nearly £1.8bn – are in London and the south-east. Few perpetrators have mitigating circumstances: 81% of frauds are carried out to fund a more lavish lifestyle. About 9% are linked to alcohol, gambling or drugs problems and 5% to debt. Only 1% of frauds are explained by "need" for extra cash and 2% are prompted by health issues or depression.
It really pays to set up regular post employment staff checks.
Reported fraud could top £5bn within a couple of years with managers uncovering more theft as they clamp down on costs and cash flow in the recession. The startling amount lost by businesses and the public sector to larger frauds last year is up 76% on 2008 levels. The figures have been collected by BDO, the accountancy firm, which has one of the largest fraud investigation teams. The average value of each fraud is now said to be over £5m compared to £1.8m in 2003.
BDO said the cost of management fraud was up 48% and the best sales staff often turned out to be the "best fraudsters". In the financial sector, fraud was up 70% to £1.34bn, but BDO estimates 90% of larger frauds in the sector are not reported.
According to the survey, most fraudsters are aged 20-39 and the vast majority – nearly £1.8bn – are in London and the south-east. Few perpetrators have mitigating circumstances: 81% of frauds are carried out to fund a more lavish lifestyle. About 9% are linked to alcohol, gambling or drugs problems and 5% to debt. Only 1% of frauds are explained by "need" for extra cash and 2% are prompted by health issues or depression.
It really pays to set up regular post employment staff checks.
England & Wales Cricket Board partner Allen Stanford
The disclosure that Allen Stanford, the Texan billionaire, a brash 58-year-old financier was charged by the US Securities and Exchange commission on 17th February 2009 with an alleged $9 billion fraud, based on false promises involving a multi-billion dollar investment scheme, will have shocked many people.
Last summer, on a day the ECB will never be allowed to forget, Stanford arrived at Lord's in a helicopter to announce details of his Super Series, an annual winner-takes-all match staged in Antigua, worth $100 million over five years.
This man admitted to knowing nothing about cricket just as Giles Clarke, founder of Majestic Wine and the ECB chairman obviously knew very little about Stanford. Meanwhile hundreds of people have now lined up to withdraw money from banks in Antigua and Caracas affiliated with the Texan billionaire. The U.S. Securities and Exchange Commission has accused Stanford of operating a fraud centered on the sale of certificates of deposit from his Antiguan affiliate, Stanford International Bank Ltd (SIB).
A simple Know Your Customer check was all that would have been necessary to determine whether it would be wise to do business with a person with his reputation, already well known to the SEC.
2009 34 year old fraudster's second childhood
Some great identity theft stories come from America, for example at a High School in Wisconsin, Wendy Brown had the miniskirt, the pom-poms and the pool party lifestyle. As far as her teachers were concerned, she was an all-American cheerleader. There was only one small problem: she was 20 years too old to be in high school
In fact, the 34-year-old fraudster, was old enough to have a teenage daughter of her own. The real person lived in another state, and it was her identity that the mother stole to fool the education authorities in the town of Ashwaubenon, Wisconsin.
Perhaps too embarrassed to question her mature looks and figure, the teachers at Ashwaubenon High School let Brown take part in classes, join the cheerleading squad and attend social events. Her scheme flopped when she failed to turn up to school one day last August. Truancy officers investigated and were astonished to find that the "cheerleader" was being held in jail, pending unrelated fraud charges.
Last week Brown was committed to three years in a psychiatric unit after a court found her not guilty of identity theft because of "mental impairment". She was also ordered to spend three years on probation for the unrelated fraud, which involved her stealing $759 (£520) from a prospective tenant of an apartment from which she had been evicted.
Some great identity theft stories come from America, for example at a High School in Wisconsin, Wendy Brown had the miniskirt, the pom-poms and the pool party lifestyle. As far as her teachers were concerned, she was an all-American cheerleader. There was only one small problem: she was 20 years too old to be in high school
In fact, the 34-year-old fraudster, was old enough to have a teenage daughter of her own. The real person lived in another state, and it was her identity that the mother stole to fool the education authorities in the town of Ashwaubenon, Wisconsin.
Perhaps too embarrassed to question her mature looks and figure, the teachers at Ashwaubenon High School let Brown take part in classes, join the cheerleading squad and attend social events. Her scheme flopped when she failed to turn up to school one day last August. Truancy officers investigated and were astonished to find that the "cheerleader" was being held in jail, pending unrelated fraud charges.
Last week Brown was committed to three years in a psychiatric unit after a court found her not guilty of identity theft because of "mental impairment". She was also ordered to spend three years on probation for the unrelated fraud, which involved her stealing $759 (£520) from a prospective tenant of an apartment from which she had been evicted.
Background Screening Industry Outlook: Three trends and tips to navigate them
Today's economic climate will deepen major trends that have been impacting the background screening industry:
Staying ahead of your competition, being more efficient, retaining your customers and offering more value is key, but how?
1. Minimise use of live court runners by taking advantage of the improving quality of online data.
In the past, a court search by a court runner was the most effective way to get an accurate criminal record. However, today courts have slimmer staffs and fewer resources dedicated to manually fulfilling searches. The shift towards making criminal background information available online is growing exponentially in America. In the UK the searcher has more difficulty. However, courts are frequently helpful, many sites are and should be used to your advantage.
2. Utilise automated technology for online data sites and minimise operating expenses.
Businesses are feeling pressure to reduce operating costs. It is now more critical to find ways to automate business processes, become more efficient and cost-effective without compromising data quality or accuracy. CRA's have alternatives to manual data acquisition via courts or online sites today. Precision data extraction using advanced artificial intelligence technology, has proved to be effective in other industries, and is now making inroads into the background checking industry. Taking advantage of this sophisticated technology doubles your efficiency and in most cases these productivity gains come at half the cost of what you'll recognize in returns.
3. Explore new product opportunities and expand your involvement in the recruitment process.
With pre-employment screening predicted to be at an all time low. Clients are beginning to use new online information from a range of sources to get additional insight about job candidates.
Today's economic climate will deepen major trends that have been impacting the background screening industry:
- Courts will be even more strapped for funds with accelerated losses to the tax base forcing them to cut back staff and increase fees.
- Background screeners will be squeezed by lower employment numbers and the push by their customers to reduce fees.
- With top line revenues at risk, investors and shareholders will demand that you preserve the bottom line.
Staying ahead of your competition, being more efficient, retaining your customers and offering more value is key, but how?
1. Minimise use of live court runners by taking advantage of the improving quality of online data.
In the past, a court search by a court runner was the most effective way to get an accurate criminal record. However, today courts have slimmer staffs and fewer resources dedicated to manually fulfilling searches. The shift towards making criminal background information available online is growing exponentially in America. In the UK the searcher has more difficulty. However, courts are frequently helpful, many sites are and should be used to your advantage.
2. Utilise automated technology for online data sites and minimise operating expenses.
Businesses are feeling pressure to reduce operating costs. It is now more critical to find ways to automate business processes, become more efficient and cost-effective without compromising data quality or accuracy. CRA's have alternatives to manual data acquisition via courts or online sites today. Precision data extraction using advanced artificial intelligence technology, has proved to be effective in other industries, and is now making inroads into the background checking industry. Taking advantage of this sophisticated technology doubles your efficiency and in most cases these productivity gains come at half the cost of what you'll recognize in returns.
3. Explore new product opportunities and expand your involvement in the recruitment process.
With pre-employment screening predicted to be at an all time low. Clients are beginning to use new online information from a range of sources to get additional insight about job candidates.
Case Studies
A debt ridden Public School Teacher stole £35,000....
PJ, 36 years, a debt ridden Public School Teacher stole £35000. He organised overseas school trips and collected the monies himself. He was known to be seriously in debt many years before he faced the ignominy of being arrested in the Headmaster's study. County Court Judgments over several years mounted up to more than £30000.
Other Case StudiesPJ, 36 years, a debt ridden Public School Teacher stole £35000. He organised overseas school trips and collected the monies himself. He was known to be seriously in debt many years before he faced the ignominy of being arrested in the Headmaster's study. County Court Judgments over several years mounted up to more than £30000.
