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Roadblock!: Unscrupulous Employees

By Baselinemag Print this article Print

It's possible to keep employees from breaking real rules in a virtual world, but you need to be able to identify and track unusual activity to catch a problem early.


Employees who process any kind of invoice or payment can often be tempted to skirt corporate guidelines-especially if they think they might be able to gain personally from fudging or hiding financial numbers or other data. And as corporations look to automate more processes in their quest for greater efficiencies, there are usually fewer human checks watching over those staffers who might be enticed to step over the line. But managers can take action to keep their employees honest.


Make sure your automated systems contain antifraud features. Antifraud software can be added to many financial processing applications. These packages can sniff out unusual activity by individual employees or a particular branch. C&S Marketing in Sacramento, Calif., offers an automated application that detects fraud among more than 55,000 loan transactions per day. For example, a mortgage company employee who repeatedly enters different income amounts, credit scores or investment portfolio totals for the same application would raise a red flag in an antifraud software system.

Recognize the limits of today's technology. Even the best antifraud software isn't going to be able to stop employees truly intent on pulling a fast one. It's especially important to be vigilant when business picks up during a boom cycle or at certain times of the year when your staff is slammed. Companies still need to conduct surprise, random audits of individual transactions. Not only will this help the company catch incidents of fraud, but it will also send a message to the organization that everyone is being monitored and held accountable.

Give employees incentives to follow corporate guidelines. Employees in any industry often feel pressure to meet or exceed previous-quarter or prior-year benchmarks in order to earn bonuses or simply keep their jobs. And if some employees are doubling or tripling their volumes by skirting corporate guidelines, some managers might be compelled to look the other way. Ameriquest vice chairman Adam Bass says his company is looking at a compensation structure that provides incentives for employees who support its best practices. While Ameriquest wouldn't comment on specifics, a bonus structure that rewarded loan agents and managers for lower loan-foreclosure and delinquency rates and higher service ratings would likely reduce any mortgage company's customer complaints.

This article was originally published on 2005-09-07
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