Fraud: The Enemy Within

1. Fraud: The Enemy Within

2. Learning objectives • What is employee (internal) fraud? • What are the risks? • Our company’s anti-fraud policy • Your responsibilities

3. What is employee (internal) fraud? “…where someone commits fraud against the company they are working for…” - Action Fraud $50 billion stolen from US businesses by employees annually (Source: Static Brain, 2015) 75% of employees admit to stealing at least once from their employer (Source: Static Brain, 2015) Most common type: Employee theft (Source: Static Brain, 2015) 585 cases in 153 organisations in 2015 (Source: CIFAS Employee Fraudscape, 2016)

4. You make the call: Is it fraud or not? “He made false claims about his qualifications and experience on his job application”  Fraud Not fraud

5. You make the call: Is it fraud or not? “She took a copy of our software and leaked information to our competitors” Fraud Not fraud 

6. You make the call: Is it fraud or not? Making false sickness claims or arriving late Unlawful withdrawals from customer accounts Posting personal items through our mail system    Fraud Not Fraud

7. Different types of employee (internal) fraud • Pilfering company assets • Falsifying information • Misusing your position • Unlawfully accessing personal or commercial data • “Playing the system”

8. When it goes wrong Insurance worker gets 10 months for selling customer data ‘Moonlighting’ registrar ordered to pay back £100k Council workers took bribes in exchange for repair contracts Postal worker stole currency

9. Understanding internal fraud Everyone does it – it’s just one of the perks of the job, isn’t it? Aw c’mon… a few envelopes and phone calls. It’s not exactly serious fraud, is it? It’s hard to complain about it when it’s rife Oh, I get it… it’s one rule for us but another for them. Managers get away with everything. Sure, it’s dishonest but it’s not an offence, is it?

10. Busting myths “It’s one of the perks of the job” No. It pushes up our costs which ultimately means we have less to spend on salaries, bonuses, benefits, etc “It’s hard to speak out against offenders” No. You can report concerns anonymously via our whistleblowing hotline “Action is never taken against senior managers who commit fraud” No. We take all forms of fraud seriously, at all levels

11. Our Anti-Fraud Policy • Providing information and training – raising awareness • Making our systems and controls fair for everyone • Appointing people with specific responsibility for investigating fraud • Requiring everyone to read and implement our Anti-Fraud Policy

12. DO • Read our Company's Anti-Fraud Policy – make sure you understand our rules and code of ethics • Know what personal use is and isn’t allowed – get permission if you’re not sure • Make sure your expense claims and timesheets are accurate and honest, with supporting evidence • Be vigilant and watch out for signs of fraud among your colleagues • Report any knowledge or suspicion of employee fraud immediately

13. DON’T • Make personal calls or use our assets for personal use without permission • Steal company time – eg arriving late, running your business in company time, excessive chatting, working slowly to create overtime, etc • Make false claims about sickness, your qualifications, experience or gaps in your employment – you may face dismissal • Bypass our systems or controls to commit fraud • Collude with suppliers to defraud our company

14. Scenario 1: Ruby’s discovery What should she do? Wait for Ian to return and let him handle it – it’s nothing to do with her Keep it quiet or she may be fired for colluding with them Probe the caller for more information Report the matter via our confidential whistleblowing hotline I’m sorry but Ian’s not here today. Can I help?… You have an arrangement with him, did you say? A payment fix? 

15. Scenario 2: Dan pulls a sickie (again!) What do you think? Everybody does it, it’s no big deal It’s OK as long as it doesn’t happen too often Maybe it is his way of dealing with the stress of the job It’s not fair on his colleagues It’s wrong but there’s nothing we can do to stop it I had a few friends round to watch the match last night. I just can’t face work today. 

16. For Managers Only

17. Scenario 1: Preventing supplier collusion How might Ruby’s company prevent supplier collusion? Putting one manager in charge of all supplier relationships Job rotation – so no single person is responsible for all supplier dealings Introducing double sign-off of all supplier payments Only using one or two trusted suppliers Conducting due diligence on all suppliers  Come to think of it… Ian has been acting a bit weird and going into another room to take calls from him  

18. Scenario 2: Dan pulls a sickie (again!) How should Dan’s boss handle this? Stop paying anyone who is off sick Introduce ‘duvet days’ so staff can take a set number of days off at short notice Make the rules clear and ensure they are followed – eg a doctor’s note Appoint a company nurse who staff must call when they are unwell There’s nothing she can do  I had a few friends round to watch the match last night. I just can’t face work today.  

19. Any Questions?

20. Next steps • Call _____ on _____ if you need information or guidance • Call _____ on _____ if you need to raise concerns • Access self-study courses on our e-learning portal for further training [or optionally – Complete your mandatory training on our corporate e-learning portal]