Festive fraud fears for retail staff – Cifas research

• Insider threat amongst the biggest fraud risk for retail leaders
• Building an effective anti-fraud culture will help protect staff
• 8 ways to strengthen internal defences and prevent the insider threat

Almost half (45%) of the retail sector’s decision-makers surveyed about fraud are concerned their own staff could be an ‘insider threat’. Cifas, the UK’s leading not-for-profit fraud prevention service, is providing key advice to help protect workforces from this growing risk during the festive period.

While many retailers warn that job cuts may follow in light of National Insurance increases, some traders are looking to recruit to plug staff shortages over the busy festive period.

If retailers do not vet their new workers properly, they could run the risk of hiring ‘insider threats’ – employees who are willing to abuse their position and put their organisations at risk. In the retail sector, this can happen in many ways. For example, staff stealing cash or equipment, exaggerating supplier invoices or timesheets for their own benefit, selling confidential company data to organised crime groups in exchange for money or lying on their CV and/or job application to land a specific role.

According to Cifas’ latest research, retail industry leaders in charge of staff training say the risk of an insider threat is one of their top three concerns, after the targeting of employees by fraudsters (74%) and cyber-attacks (77%).

To help retailers improve their internal defences and detect and prevent the insider threat, Cifas has provided 8 tips.

1. Conduct regular fraud risk assessments to identify gaps and vulnerabilities and address them promptly.
2. Thoroughly vet job candidates – go through their CVs, qualifications, and work history in detail. Consider using vetting specialists to verify authenticity too.
3. Implement rigorous background checks that continue beyond the onboarding stage and throughout an employee’s entire lifecycle.
4. Invest in fraud prevention training for staff so they can be empowered and equipped with the knowledge to recognise red flags.
5. Enforce strong security measures by strengthening security protocols – such as multifactor authentication and facial recognition – to protect sensitive information.
6. Monitor employee behaviour. This is not about being ‘Big Brother’, it is about being a responsible leader who can act when sudden staff lifestyle changes do not align with their salary, or they exhibit a reluctance to follow company policies.
7. Create a culture of transparency and accountability and develop robust codes of conduct that ensure employees know how to confidentially report concerns – whether through managers or an anonymous whistleblowing service.
8. Prioritise staff welfare by providing resources and support services that positively impact their wellbeing so that they do not have feelings of engaging in dishonest behaviour because of personal or financial pressures.

Rachael Tiffen, Director of Learning at Cifas, said: ‘Staff are often the first line of defence for retailers and good, honest employees are critical during peak shopping season.

‘It is important outlets focus on how they can protect their environment to not only deter the risk of an insider threat but to make sure they do not exacerbate the pressures many feel during a really challenging time for the whole industry.

‘Implementing or improving internal controls and security measures, providing consistent and specialist staff education, and being committed to building and developing an anti-fraud culture can all help to stop dishonest conduct at source.’

Cifas’ Insider Threat Protect solution helps to target internal risks through data, intelligence, and learning. Additionally, through the Cifas Fraud and Cyber Academy courses on offer and the Digital Learning programme, retailers can add another critical layer of protection to their workforces.

ENDS

Notes to Editors

For more information, please contact Hayley Paterson, Cifas Press and PR Manager, on 020 4551 7072 or press@cifas.org.uk.

Survey methodology

The survey was carried out by Opinion Matters between 2 May-3 June 2024 on behalf of Cifas with a nationally representative sample of 500 UK-based decision makers (18+). Respondents were responsible for staff training programmes/budgets and worked in companies that employed 1,000-plus people and offered hybrid options.

About Cifas

Cifas is the UK’s largest not-for-profit fraud prevention service. It has more than 750 members from across the banking, retail, insurance, telecoms and technology sectors. Cifas provides tools and services that help prevent fraud and protect both business and consumers through data and intelligence. Cifas also delivers specialist counter-fraud training through its Cifas Fraud and Cyber Academy and Digital Learning programme.

Cifas’ data is included in the Office of National Statistics England and Wales Crime Statistics of police recorded crime and it works alongside law enforcement agencies in tackling fraud. In 2023, Cifas members prevented more than £1.8bn of fraud losses. Website | LinkedIn | X

About Opinion Matters

Opinion Matters is an independent market research agency that create bespoke market research solutions for businesses, organisations, and agencies worldwide. Opinion Matters abides by and employs members of the Market Research Society which is based on the ESOMAR principles.

Contact us at press@cifas.org.uk