As record numbers of seasonal hires are expected this year in the U.S., fraud experts warn that the need to quickly add staff should not get in the way of properly screening employees.
The Association of Certified Fraud Examiners (ACFE), the world's largest anti-fraud organization, stresses that employee background screening, proper training, and an ethical code of conduct are imperative for reducing the risk of fraud during the holidays.
"While many businesses have formal hiring procedures, the pressure to remain fully staffed around the holidays often drives [them] to short-cut the process," said Eric Feldman, managing director, corporate ethics and compliance programs at Affiliated Monitors, in a statement. "It is critically important for businesses to follow all of the usual procedures; entry-level and temporary holiday positions are no exception. Businesses that bypass this process around the holidays not only run the risk of hiring serial fraudsters, but can potentially undermine the morale of the rest of the staff and the ethical culture of their organization."
Businesses lose an estimated 5% of total revenue to fraud, according to the ACFE's 2014 Report to the Nations on Occupational Fraud and Abuse,with a notable 20% estimated increase in fraud over the holiday season.
"It’s a serious problem," said Bruce Dorris, ACFE vice president and program director, in a statement. "Without controls in place to prevent and detect fraud, that degree of loss can be devastating for any company. During the holidays, high traffic and increased sales provide an even bigger opportunity for fraudsters, both internally and externally."
Dorris and Feldman urge basic training in fraud awareness for employees, as well as communicating a zero-tolerance approach toward any fraud-related acts. Employee screening that includes criminal checks, complete reference checks, and even ethics tests should also be vital.
"Holiday time may be 'party time,' but it’s not the time to lighten up on internal controls," stated Feldman. "Even the most honest of employees can be tempted to engage in unethical behavior to meet the pressures of holiday spending, particularly if they see that there are greater opportunities to do so through temporarily relaxed controls. Due diligence dictates that businesses keep their guards up throughout the high-risk holiday season.
For more information on the ACFE, visit their sitehere.
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