Hot-fingered B.C. employees are stealing millions of dollars from their employers.
The B.C. Crime Prevention Bureau says 60 to 70 per cent of corporate business losses are due to employee fraud but only a third are reported to police.
Big and small companies are being fleeced, a survey conducted for professional services firm Ernst & Young LLP by Ipsos-Reid shows.
"If you've got more than five employees, you're a victim of fraud. In effect, all companies are suffering loss through fraud," said Nick Hodson, a partner with Ernst's litigation advisory service practice.
Internal theft is a growing problem for retailers, says Kevin Evans, vice-president Western Canada for the Retail Council of Canada.
Retailers say dishonest employees cost them almost $3 million a day, virtually the same as shoplifting. Employee theft accounts for 33 per cent of total theft, retailers say.
According to a recent U.S. study by the Association of Certified Fraud Examiners, small businesses are the most vulnerable -- the average scheme in a small business costs $127,500 US in losses, as opposed to $97,000 in the largest companies.
Bill Cotter, a security consultant and certified fraud examiner based in Surrey, says his sense is that exployee fraud is on the increase in larger Canadian centres, such as Vancouver -- where the cost of living is high and the economy has forced companies to slash workforces.
"In the last couple of years, my feeling is that it's increasing because of the downsizing and consolidation we're seeing," said Cotter, a former Mountie.
"That inevitably leads to cutbacks and layoffs. The people remaining are wondering if they are next, so they'd better try to get some more here or there.
"On the other side, there's less dilligence by the company, there's no internal audit mechanism or it's handled by supervisors who wouldn't know a red flag if they saw one," he said.
Cotter said rationalization plays a large part in employee fraud -- a worker feeling he or she is owed something more due to perceptions of increased workload or under-compensation.
"You need to have a fraud-awareness plan and open communication throughout the company," he said. "You always think of the person at the lower end of the chain doing these things, but it's all across the board."
Canadian workers are well aware of the growing problem and 28 per cent say they are personally aware of people stealing from their employers, the survey says.
Of those asked, 38 per cent were "very likely," and 39 per cent "somewhat likely" to report a co-worker's fraudulent activities.
Surprisingly, outright theft is way down the list of preferred crimes. Major problem areas are inflating expense accounts, "cooking the books," and pocketing money from cash sales.
Increasing numbers of workers are willing to blow the whistle. The survey found 77 per cent of employees ready to report crimes.
aford@pacpress.southam.ca
jjamieson@pacpress.southam.ca
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