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One of the topics I frequently return to is the risk
aspect of a recruiter’s job, or the ‘defensive’
recruitment skills, such as background and reference checking, that are a
necessary part of doing a complete job as a recruiter. Unfortunately, there is
still an undesirable tendency for these skills to be deemed an ‘admin’ part of
a recruiter’s job.


So it was with great interest that I read a recent news
generated by the release of research into employee fraud in
financial institutions in the period since January 2000.


Here’s what the report revealed


Total amount of money fraudulently obtained by
$217.3 million
Number of individual cases
120 (53% male, 47% female)
Number of these individual cases that were at one of
the ‘Big 4’ banks
Largest individual fraud (which primarily funded
expensive pearls, houses and Michael Jackson paraphernalia)
$45 million
20 years plus service of employee to defrauded
1/3rd of cases
10 – 20 years service of employee to defrauded
1/3rd of cases
Ten year age range most common in employee
30-39 years (41% of cases)
Previous convictions for fraud amongst 123
5 people
Most common motivation for fraud
Gambling (52% of cases)
Second most common motivation for fraud
Improve lifestyle (29% of cases)
Most common way the fraud was executed
Money stolen from customers’ bank accounts or term
deposits (34% of cases)
Longest period of undetected fraud
16 years

The report also revealed that one of the 120 cases
involved an employee that was hired without any background check which, had it
been undertaken, would have revealed this man’s three   (!) previous
gambling related convictions for fraud.


The report identifies the four biggest areas of risk
in motivating or enabling fraud:


gambling addiction

ignoring company

lack of supervision
in their role

reactivating the
accounts of former employees

logging into the
system under another employee’s name


Recruiters would do well to
absorb these statistics (remembering the report only reported on fraud within
the financial services sector) and remember that a candidate is not obligated
to volunteer   information about a conviction for fraud (or any other
conviction for that matter). It is essential that recruiter and hiring managers
have appropriate questions in their screening of candidates as well as a
rigourous background checking process.


A recruiter should be
professionally skeptical at all times. Assume nothing. Ask and check.


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