Employee fraud could cost UK PLC as much as £13 billion this year
01 November 2005 | 1162 views | 0
Source: GB Group
The cost of employee related identity fraud in the UK could soon top £13 billion as criminal gangs infiltrate banks and other businesses with bogus employees planted to help commit fraud, a leading fraud prevention company has claimed.
The Financial Services Authority has warned that improvements in anti-fraud measures mean that organised crime syndicates are now seeking increasingly sophisticated ways to infiltrate organisations and instances of employee "plants" have rocketed in the past 18 months.
Identity verification experts GB Group plc point out that any employee vetting procedures should now include full identity verification as a priority for HR departments to ensure a business really does know who its employees are.
A recent survey by Norwich Union estimated the cost of fraud to the UK economy to be in excess of £16 bn. GB Group's own research backs up previously published surveys that insider complicity accounts for approximately 85% of fraud within business - in other words a cost to the taxpayer of £13.6 bn. With identity theft on the rise, it is likely that this figure will climb much higher unless organisations start implementing a rigorous policy of "Know Your Employee" immediately.
Over 4.5 million people change jobs every year in the UK. Unless businesses start verifying the actual identity of each employee when they recruit them, they will remain increasingly exposed to the risks of fraud from within.
GB Group, the Chester based data services specialists who, in conjunction with BT developed the award winning identity verification service, URU™, has seen a dramatic rise in the number of enquiries it now receives for its 'Know Your Employee' (KYE) service.
"We are seeing more and more clients initiate projects to deal with the whole issue of internal fraud," says Rob Laurence, MD of GB Group's Data Authentication Division. "Our research shows that employee fraud may account for as much as 85% of fraud committed in business. With over 130 000 instances of identity theft last year alone, it is becoming easier for fraudsters to assume a new identity and take up positions in any business with the sole purpose of defrauding it. Being able to verify employees' identity before they get inside the organisation has been a massive boost to our clients in the fight against internal fraud.''