Fraud Alert to Employers as Festive Season Begins

As the festive season gets into full swing, employers are being reminded by KPMG of ‘the threat from within’.

Priya Giuliani, a partner in KPMG’s UK forensic risk consulting practice warns that, with many businesses in a relaxed mood, employees intent on committing fraud will try to take advantage of opportunities where the usual ‘safety checks’ are relaxed, and either attempt to remove stock or get away with misappropriating assets.

“Money can be tight at this time of year with higher than usual spending leading to additional pressures on employees,” says Giuliani. “Combine this with a time of year when targets and bonuses are assessed and it is easy to see how employees can be tempted to falsify sales or overstate performance, so they look like they are hitting targets.

“For many businesses, the lead up to Christmas also represents a boost in demand. Most turn to temporary staff for support, but in the rush to improve customer service they may not adequately vet the new recruits. With many regular staff taking time off, the resulting lack of supervision also provides a rise in opportunities for the fraudster.

“We have also seen a marked rise in ‘payment diversion fraud’, where fake requests are made to change supplier’s bank details so that funds are diverted into the fraudster’s own bank account. Our analysis shows that cases range in value from just over £30,000 lost by one business in a single transaction to a total of £5m extracted from another. In almost all the cases we’ve seen, fraudsters appear to be making use of openly declared business relationships.

“It’s particularly worrying that fraudsters often rationalise their behaviour. They may believe that they are only ‘borrowing’ the money from their employer to tide them over an expensive Christmas, but the fact is that their actions can have serious repercussions on an organisation’s financial stability. It’s something that cannot be ignored because, if it is, any business falling victim to fraud is more likely to be a ghost to Christmas future.”


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