The ‘fraud triangle’ and other ways to find out if employees are stealing

Though you may think you really know and trust your employees,  fraud can happen in any business.

And as a big-picture decision maker, you’ll definitely be implicated to some degree if an employee is caught.

Janine Driver, an expert in dishonesty who’s spent years working with the FBI and CIA, divulged the warning signs that executives need to be especially aware of.

The fraud triangle

This refers to three specific characteristics of an employee that is stealing from the company. Keep an eye out for employees who:

1. Have access to money, valuable goods, or other assets
2. Are facing financial pressure such as a child in college or a home foreclosure
3. Feel as if or talk openly about how they deserve higher pay or should be compensated for extra time on the job.

Now that’s not to say that you should cast a suspicious eye to every employee that’s sending their kid through college and asking for a raise. But if all three of these signs are present with a certain employee, then it certainly wouldn’t hurt to keep an eye on that employee.

Spot the signs during the interview

Not every department thinks about fraud when interviewing for candidates, but for a position in finance/accounting, there needs to be at least some type of screening, even if it’s just your own personal test.

Driver recommends a few things. For starters, get a credit report of employees before signing them on. If someone’s facing the sort of financial trouble that might lead him or her to steal, chances are it’ll turn up. And don’t get the impression that obtaining credit checks are frowned upon. More and more employers are resorting to this practice, including the federal government.

Another measure is to require job-seekers to certify the answers on their application are true before the very first question. If you leave it at the end, applicants will mentally justify their fibs and just sign the application.

But take this a step further in the interview process by asking this simple question: “On a scale of 1 to 100, how accurate is this resume?” Preface the question by saying you plan to check the candidate’s background point by point, so now is the time to point out inaccuracies.

More times than not, the answers will be revelatory. Almost no one says 100%. They may say 90%, though, in which case you ask about the 10%. And then the applicant may refer to being unsure when a job started — or it may be something bigger, like that they were actually fired from a job, instead of quit.

What safeguards are in place at your business to root out possible fraudulent activity? Let us know in the comments below.