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A Step-by-Step Guide in Dealing with Fraudulent Employees

  • May 7, 2020

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A Step-by-Step Guide in Dealing with Fraudulent Employees

Not sure how to go about dealing with fraudulent employees?

When you receive claims against a fraudulent employee, the confrontation is always the hardest part. This is an employee to whom you conferred your trust, and regardless of their reason - a recent loss, the downward economy, or an honest mistake - you are required to deal with the offense.

The easiest thing your management can swear by to prevent fraud is bolstering your defenses. Pre-employment skills testing companies help you scrutinize applicants with depth, conscience, and accuracy so that you only work with the best. Here's how you approach a fraud claim at work.

Gather your evidence

In fraud reports, time is always of the essence. Delaying the investigation doesn't just allow the alleged employee to commit another fraud. But it also gradually inhibits the statute of limitations, so act quickly.

Related: Why Businesses Hire A Private Detective Company

When gathering evidence, you might need to designate an investigator, whether within or outside your company. Consult with managers, close employees, and department heads. If you do, it is important to establish confidentiality guidelines. These clarify that any pieces of evidence gathered shall be shared only with the investigative team.

During the investigation, you might need to suspend the accused employee to a paid leave until evidence is determined before filing formal charges.

Determine the gravity

Determining the weight of the penalty usually involves a handful of factors. First, you have to determine the severity and duration of the act. How much money was wrongfully redacted from financial reports, and how often has the employee-in-charge been committing the deed? Then, determine if their impact on the company is indispensable. Have they been performing exceptionally? Do they hold a key position? Are they worth trusting past the transgression?

Regardless of which factors matter more than the rest, there should be a sure and precise punishment. Stand by your company's policies and enact your decision right away.

Talk to the employee

It's never a smooth conversation, so you must stick to a well-detailed report so that the grounds of their immediate suspension or termination is clear.

Invite them to your office in confidence, and get straight to the point by telling them that you have evidence proving their fraud. Chronologically outline your pieces of evidence, being careful not to disclose any employee's name protected by your confidentiality guidelines. Lastly, inform them of the punishment.

You will want to disseminate a formal report regarding the case to the rest of the employees, not just to quell any office gossip but also to reinforce your compliance with corporate policies regarding fraud.

Recover the damages

Once the confrontation is over with, you would want to offset the amount lost due to that employee's fraud. Part of the termination of the fraudulent employee is asking the same for restitution. But that hardly ever happens due to the amount spent. That is where you file civil or criminal charges.

You will also want to inform your insurance provider within a couple of months from the fraud claims to ensure coverage. Document any proof of loss and file as soon as possible to make sure it is properly recorded and recognized.

After this whole episode, your company should take great pains to strengthen your internal monitoring systems so that fraud never happens again.