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How to Eliminate Common Sources of Employee Fraud

While you want to believe all your employees are loyal and trustworthy, many reasons exist for why a worker may commit fraud. And there are many ways that they can do it. Workplace fraud, which ranges from asset misappropriation to data theft, can have a major impact on your organization, so it is important for everyone involved to take steps to protect themselves, which in turn, helps to protect their company.

Modern technology allows for conducting business faster and more efficiently, but on the flip side it also presents a greater opportunity for fraud. Awareness and prevention are key deterrents when it comes to combating fraud. Everyone needs to do their part to safeguard workspaces and other vulnerable areas in their offices.

Fraud prevention should be woven into the fabric of your company, starting from the very top and trickling down to the very bottom. A clear tone must be set that fraud of any kind will not be tolerated. In terms of culture, senior executives must lead by example.

Clear communication and relevant information can provide a good foundation for implementing and maintaining sound internal practices to reduce risk. In addition, employees must be accountable to follow safety procedures, and a process must be in place for reporting misconduct.

Generally three factors come together to enable fraud: the opportunity to commit the act, a compelling reason to do it it, and the ability to rationalize why it is okay. This fraud triangle can be tackled effectively through developing a culture of ethical behavior and creating sound internal control systems for all employees to follow.

Here are five ways to help protect fraud-vulnerable areas of your office and prevent common fraud schemes, from shoulder surfing to credential hacking to simple theft:

1) Keep Sensitive Information Away from Printers and Fax Machines

Everyone has seen documents containing sensitive information left at printers and on fax machines. Instead of having to decide which ones are confidential, implement a shred-all policy so paper waste gets shredded at least once a week.

2) Lock All Cell Phones, Laptops and Desktops

It is a big no-no to walk away from a workstation without locking the computer first. The same holds true for devices. Keep them password protected and stored in a safe location.

3) Be Safe with Credentials

Never write down passwords and leave them for others to see. You should require complex passwords - preferably passphrases - and should consider two-factor authentication. In addition, you can implement password managers to keep everything organized. Meanwhile, only authorized employees should be permitted access to financial systems.

4) Reduce Desk Clutter

That loose paperwork at a workspace can lead to unauthorized snooping. Encourage employees to keep their spaces neat and tidy.

5) Store Keys Securely and Avoid Displaying Sensitive Information 

Keep keys to desk drawers and filing cabinets secured and put away. There should be zero display of any sensitive information for others to see on PCs, walls and desk calendars. Employees also must erase notes on whiteboards - and not leave notebooks, binders, and, sticky notes with private information out in the open.


The best way to ensure that fraud stays at bay is to inform employees about policies and procedures that are related to fraud, the internal mechanisms put in place to prevent fraud and the code and ethics of the organization.

Discipline for violations of these policies should be clearly laid out. Have every employee sign a form to verify that they have read through these policies and understand them. On top of that, employees should receive annual training on these tips mentioned above, or receive emails throughout the year to remind them of their company's policies. Although fraud is a serious threat, following these recommendations will help to greatly reduce an organization's vulnerability. 

This guest post was written by Sterling Payment Technologies, a Tampa, Fla.-based payment processor.