Every business is susceptible to embezzlers, according to a new study by specialty insurer Hiscox, but there are warning signs of embezzlement that employers should know.
“When an embezzler is discovered, particularly after a long‑running scheme, those in charge often ask, ‘Why didn’t I see this sooner?’ To catch a thief, you need to know the warning signs,” the study says. Surprisingly, some of the warning signs an employee is stealing from you are the same as the good qualities you want in an employee, such as intelligence and dedication.
The study lists five common characteristics of an embezzler:
- picks things up quickly and eager to know how everything in the office works;
- a rule-breaker in and out of work life, from speeding tickets to overusing sick time;
- feels he or she is being treated unfairly and may be tempted to steal to even the score;
- flaunts wealth, clearly living a lifestyle that is out of proportion to salary; and
- comes in early, leaves late, and never takes vacations.
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In addition to watching for these characteristics, Hiscox suggests having a copy of your company’s bank statements mailed to you at home. It’s also important to have a system of checks and balances: someone other than the bookkeeper should review all bank statements and cancelled checks. The bottom line: more than one person should oversee every transaction.
If you do discover a problem, contact law enforcement and press charges. Keeping quiet will send the wrong message to other employees. Try to avoid rushing to judgment or confronting a suspicious employee; take the time to get all of the facts before making a move. Also, never interview an employee by yourself; have an HR person in the room, take careful notes and type them up right away.