INTRODUCTION WHY DO YOU NEED VETTING SERVICES?

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1 INTRODUCTION Thank you for the opportunity provided by you for URED to submit a proposal for the services that we can render to your organization. URED specialises in vetting services for prospect new employees or applicant for a vacancy at a company or institution. We create tailor packages for our clients to suit their needs in the specific industry. WHY DO YOU NEED VETTING SERVICES? Fraud Prevention Through Employment Screening, a 2005 paper by UK business analyst and fraud expert Rachel Tiffen for SAS, points out that while there is often great attention paid to anti-fraud controls designed to detect dishonest activity by existing employees, there are frequently few defenses in place to stop those with unsavory intentions entering the organisation in the first place. Vulnerable organisations are those in which resumes are accepted on face value and, when reference and employment history checks are carried out, they are facilitated by HR personnel with no training in fraud detection and employment history investigation. Tiffen (2005) states that false or misleading information or gaps in employment history on an employee s resume is a sound warning sign when it comes to the risk of occupational fraud and that a high number of United Kingdom occupational fraud cases were perpetrated by

2 employees with falsified CV s. Problems can also arise through internal promotions and backfilling using existing employees. Stringent and well publicised screening requirements are an effective way to deter fraudsters on the hunt for vulnerable employers and those who may have had a chequered past. Vetting should be an integral part of recruitment for effective risk management. Ideally a police history check, employment history investigation, reference check and qualifications verification should be conducted by a person or company experienced in fraud detection. SERVICES RENDERED The basic service that we provide is to verify the information submitted on the applicants CV and to do all the reference checks for the client based on a forensic interview that has been developed over eight years of experience. We also indicate any discrepancies on the CV to the client. However our services are not limited to the former, we can also verify the qualifications submitted on the applicants CV, do an ITC check, police clearance, good standing with the Receiver of Revenue, conflict of interest according to official documents and an overall social and media profile. The reference check performed includes aspects that were identified as red flag behavior for higher probability for fraud in the 2012 international Fraud Study conducted by the Association of Certified Fraud Examiners. The table below indicates the statistics in correlations with the mentioned behavior.

3 BEHAVIORAL RED FLAG OF PERPETRATORS TABLE 1 We compile a report with the necessary information to our client in order for them to make an informed decision whether or not they should extend an offer of employment to the applicant. WHY YOUR ORGANISATION SHOULD OUTSOURCE THIS SERVICE? The person that conducts a vetting process has to be trained in fraud detection in order to be vigilant and to know what to look for and to be cautious of when conducting these checks. Our personnel are all specially trained in this area of fraud detection. We also have extensive processes, systems and countermeasures in place to obtain the best possible information on each candidate.

4 We have an extensive client database that allows us to obtain information that would normally not have been provided should the company not have a working relationship with the named organization. We have an extensive database that is used for referencing purposes. The information found on this database is provided to us by several of our clients and other companies, creating a platform with validated information to assist in the employment history of applicants. By making use of an external company to provide the vetting services the issue of nepotism is excluded as the investigation done is impartial. Your HR personnel will not have to go through the tedious process of finding references of applicants, saving you time and money. Pre-Employment Polygraph Tests can be limited or completely done away with, saving you time and money. WHY IT IS ESSENTIAL FOR YOUR ORGINISATION TO MAKE USE OF THIS SERVICE 1. During a study conducted in 94 countries by the ACFE in 2011, it was found that the typical organization losses between 5 and 7 % of its annual revenue to fraud. 2. Most fraud within an orginasation was caused by employees. POSITIONS OF THE PERPETRATORS

5 TABLE 2 3. The fraud that was detected lasted an average of 18 months before being detected and the most common industries that are victimized are banking and financial services, government and public administration and manufacturing sectors. TABLE 3 4. The six most common departments in which fraud perpetrators worked were accounting, operations, sales, executive/upper management, customer service and purchasing.

6 TABLE 4 5. Collectively, these six departments accounted for 77% of all cases reported to us. As the chart on the following slide illustrates, the distribution of cases based on the perpetrator s department was remarkably similar to the distribution in our 2010 study. 6. Approximately 87% of occupational fraudsters have never been charged or convicted and 84% has never been punished or terminated by employer for fraud related conduct. 7. In 81% of the cases the fraudsters displayed one or more behavioral red flags that often associates with fraudulent conduct ie. living beyond their means, financial difficulties, job hopping, close association with vendors and customers. Nearly half of the victims of fraud never recover the losses. PERPETRATORS CRIMINAL BACKGROUND

7 TABLE 5 8. In Namibia and Africa most cases of fraud is not reported to law enforcement. The most common response is that it is too time consuming and costly and can continue for several years before any judgment is made. 9. Most companies that have implemented stringent vetting services have seen a substantial decrease in theft and fraud within the company. 10. All companies or organisations that have stringent vetting processes have indicated enhanced staff efficiency within two years. The 2012 Report to the Nations on Occupational Fraud and Abuse is based on the results of an online survey opened to 34,275 Certified Fraud Examiners (CFEs) from October 2011 to December 2011 globally. TARIFF For companies that has less than 50 employees we recommend that the vetting service be used on ad hoc basis when needed at a fee of N$ per person. For companies with more than 50 employees we recommend to operate on a monthly retainer. This is standard fee, paid once a month and as many references as needed can be requested without any additional charges. (Contact us for a quote) CONCLUSION

8 When a person applies to any company with fraudulent information on his or her CV and they are offered employment based on this information, a deduction is made by the person that the company is not diligent and that certain discretions will not be noticed. Pre-Employment screening and staff vetting should be the very first step that any company take for fraud and theft prevention. Prevention is better than cure and once a person is employed there is no quantifying the damage that a dishonest employee can cause. Thus you should act now to implement this anti-fraud policy and stop employee theft and fraud at your door! If you have any questions please do not hesitate to contact me at any time. Jaime Smith URED