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20 SIGNS OF THEFT AND FRAUD
IN THE WORKPLACE

Employee theft is a harsh reality that plagues many industries. Businesses of all sizes are hit every year by losses from dishonest employees who take advantage of weak security countermeasures and protocols within the companies and exploit those weaknesses and vulnerabilities for their own benefit.

While the most common methods used by employees to steal from their companies are simple in nature and execution, some are more elaborate and complex due to advanced protection and oversight measures put in place by the larger companies with dedicated security budgets.

There are, however, 20  signs of theft and fraud in the workplace that employers can look out for within their business operations, their office environment, and their employees’ behaviors that could indicate that their employees may be stealing from them.

 BUSINESS OPERATIONS

  1. Unexplained drop in profits
  2. New and unverified vendors
  3. Increase in the number of reported expenses
  4. Missing cash, equipment, products, or supplies
  5. Increase in damaged products and returned goods
  6. Increase in refunds, chargebacks and/or cancelled transactions
  7. Increase in errors and inconsistencies on the expense reports

OFFICE ENVIRONMENT

  1. Misplaced equipment
  2. Unlocked exits and windows
  3. Increase in non-customer traffic (invited by employees)
  4. Increase in equipment breakdown (that needs to be replaced)
  5. Strange cars parked (and seemingly waiting for something/someone) nearby

Indications of theft and fraud within business operations and office environments are straightforward, and when noticed, should be investigated further to find the root cause of those occurrences. On their own, they could have simple explanations or result from innocent mistakes that can usually be addressed and resolved quickly as there is no malicious planning behind them.

However, as their numbers grow, so does their strength; and the more of those signs that an employer can notice, the more reasons there are to take the situation seriously and to take appropriate actions in order to mitigate damages and limit losses as soon as possible.

More advanced red flags can be observed within the company’s employees themselves since internal theft and fraud, as the name suggests, are executed by them. Meaning that the employees who are involved in such activities will most likely exhibit strange or unusual behaviors while trying to cover up their actions.

It is important to keep in mind that those seemingly secretive, suspicious, or odd behaviors can also be explained by other events in the employee’s life like a death in a family, cheating on their spouse, getting an inheritance, or looking for a new job. All those events can cause the employee to behave differently around their colleagues and supervisors, but that does not mean that they are necessarily involved in any illicit activities.

It is therefore critical not to jump to any conclusions when those behavioral signs are observed on their own. However, when combined with other red flags, those signs can serve as a good reason to conduct a more in-depth review and investigate the situation further.

EMPLOYEE BEHAVIOR

  1. Change in work habits: If an otherwise outgoing employee suddenly wants to work alone, during unusual hours, with little to no supervision, this could be an indication that they are planning or are trying to hide something.
  2. Poor work performance: If sensing that their job is on the line or that they are about to get fired, there may be more interest and motivation for the employee to take advantage of the company’s resources for their own benefit and profit while they still have access to them.
  3. Excessive absences: If unexplained by other life events, an increase in absences could be an indication that the employee is trying to avoid something at work, especially on the inventory count days or site inspection days, for example.
  4. Excessive presence: If an employee is always present and never takes time off (unless it is really their hard-working nature and they have no life outside their work) it could be an indication that they may be running a scheme that could be uncovered if their position is filled by someone else during their absence.
  5. Increase in complaints about employment: Increase in the number of complaints against the employer may lead to acts of revenge by doing actions that will deliberately harm the company. Additionally, if the complaints seem to be unjustified, they may indicate that the employee is trying to find an excuse or a “legitimate” reason for their actions by vilifying the employer.
  6. Defensiveness and secretiveness at work: When an employee is trying to shift blame for workplace events, is hiding their screen when supervisors or other employees pass by their desk, or is trying to lay low and avoid seemingly innocent and normal discussions about office occurrences, and takes overly defensive positions about some topics; it could indicate that they are trying to hide and/or distance themselves from something at the workplace.
  7. Unexplained close relationships: When an employee is extremely close to a supplier, a client, or a colleague and they are very protective of their relationship, it could be an indication of a secret arrangement between those parties, possible kickbacks, collusion, or other unauthorized favors.
  8. A personal lifestyle that doesn’t match salary: If, all of a sudden and without being explained by other life events such as winning a lottery or having a second job, for example, an employee has more luxurious clothes, cars, and lifestyle without receiving a proportional raise; it could be a sign that this employee may be somehow involved or connected to other red flags (related to theft and fraud) that were observed within the company.

Big or small, companies of all sizes face the problem of dishonest employees at one time or another. Stealing and defrauding a company is stressful on a person, and they will likely leave some signs or clues in their behavior that will indicate that something is not right. Knowing what to look for may help the employer address any concerns sooner rather than later and prevent the situation from developing further.

The more vigilant and observant the supervisors, managers, and other employees are, the easier it is to spot the signs that someone within the company may be doing something inappropriate or illegal. However, when an additional set of eyes and professional expertise in the subject matter are required, Private Investigators can be of great help to employers in dealing with thefts and other workplace relates issues.

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