Many Australian businesses rely on trustworthy employees to handle large quantities of money but what happens when your trust has been misplaced?

Employee fraud is unfortunately a very real problem in Australia, with many cases over the past decade resulting in multi-million dollar loss.

In particular, the financial and retail industries are facing the largest risk of million dollar fraud cases, according to a February 25 report from Inside Retail.

So, how can retailers in Australia prevent and recover from employee fraud?

Identifying fraud

Detecting and identifying fraud in your business can be a very difficult process. This is because the individuals involved in these incidents are likely to making significant efforts to cover their tracks and hide their deception.

Some key identifiers that could signal fraud is present in your business include:

  • An employee regularly works outside normal business hours
  • Bottom line results are inconsistent with market conditions (without reasonable explanation)
  • Missing documents regarding major transactions
  • Employee hesitant to accept help or allow others to work within their parameters
  • The employee seems to consistently live beyond their means

Dealing with fraud

Once you have discovered fraud within your business, it is important you seek professional advice as soon as possible.

Many employers leap straight to firing the offenders, but this could lead to an unfair dismissal case if the fraud is incorrectly attributed or insufficient evidence is collected.

Instead, someone with adequate training should investigate the fraud. It is permissible to suspend employees pending the results of this investigation, if you are worried about further losses.

Fraud should also be reported to both the police and your legal advisors. Additionally, any financial losses should be registered with your retail insurance provider.

If you suspect fraud is being committed in your business, you may also want to ensure you have employment practices liability cover in place. This will help to protect your company if found incorrect investigation techniques lead to an employee claiming wrongful termination or invasion of privacy.