Travel firms warned to take steps to prevent employee fraud

All travel businesses are vulnerable to fraud committed by their own staff and need to take steps to prevent it, the counter fraud campaign 2019 has warned.

Employee fraud has come under the spotlight this week in part three of a 10-week email awareness campaign being sent out to travel anti-fraud group Profit’s membership organisations such as Abta to send out to their travel agent and tour operator members.

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The campaign, by Profit, the Fraud Intelligence Network (Fin) and the City of London Police, also highlights that fraud disproportionately affects small companies. The 2016 Report to the Nations on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners said businesses with fewer than 100 employees had the highest number of fraud cases.

This week’s focus on employee fraud has warned every organisation is vulnerable to fraud and corruption and warned all companies to have systems in place to reduce the risks.

The campaign highlights asset misappropriation; accounting fraud and bribery.

Examples of asset misappropriation include stealing money from the company; skimming (not registering the sale and pocketing the money); pocketing money after selling a holiday; and using a company credit card for personal use.

To reduce the risks of this, Profit’s advice urges companies to ensure staff only have access to systems and financial arrangements they require for their role and suggests all requests for payment or claims should be supported by order forms, invoices and receipts and cross-referenced with booking or ordering systems.

Other steps to take include conducting random company account audits; separating functions so those making payments cannot authorise payments or make refunds; rotating staff in the finance team’s duties and taking an interest in staff to see if they are living beyond their means.

The campaign says separating out accounting duties, so no one person has access to all the accounts, is critical to prevent accounting fraud.

“One of the biggest mistakes any company can make is failing to segregrate accounting duties. An employee who is the sole contact for account holders and the books expert has a much easier time getting away with accounts receivable fraud than someone who splits their role with a colleague,” it says.

Other action for companies to take include making sure two employees are present during key accounting talks, and training staff on fraud.

Under section 7 of the Bribery Act 2010, a company can be fined an unlimited amount for failing to prevent bribery. The campaign recommends companies take five steps to reduce the risk of bribery: identify the risks your business faces; assess those risks; design systems to mitigate the risk; monitor the systems; keep of record of what has been done and why.

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