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Expert Guide to ‘Profiling’ Expense Fraudsters

    The skills that make a great finance director are closely matched to those qualities needed by a crime detective.

    There’s the same forensic ability to search through data and investigate the cause of any wrongdoings. But there’s also the need to look beyond the data at employee motivations.

    It’s something finance directors have to do all the time.

    Will a relaxed expenses policy be taken advantage of by employees or would it reduce resentment and lead to increased company compliance?

    So it’s interesting to look at the way fraud prevention experts use psychology to help understand of employees’ motivations when it comes to committing corporate workplace fiddles.

    The main organisation tasked with raising awareness of business fraud is CIFAS. The acronym originally stood for the Credit Industry Fraud Avoidance Service but the group’s remit has since become much broader.

    The government-backed organisation now maintains the National Fraud Database and provides support to businesses in the ongoing fight against fraud; estimated to cost UK companies around £2 billion each year.

    The data they have collected over the years has allowed them to build up a profile of employee types which are likely to pose the greatest fraud risk. It’s a similar ‘profiling’ technique used in police investigations.

    Here are the two main risk types identified by CIFAS:

    Profile one

    Profile one: Discontented

    Age: Middle-aged (over 40 years-old

    Gender: Male

    Motive: Resentful or hold a grudge


    These are typically long-serving employees who have risen to a level which they are unlikely to progress beyond. Their seniority and perceived loyalty means they are also liable to become disgruntled and disaffected.

    Profile two

    Profile two: Opportunist

    Age: Junior (under 25 years-old)

    Gender: Male

    Motive: Mainly financial


    These are employees who are likely to see expense fraud as a way of supplementing what they perceive to be low pay. They are likely to aspire to a lavish lifestyle with high spending often leading them into financial difficulties; often connected to pre-existing student debts.

    While the discontented senior employee is likely to actively plan and search for ways to exploit an expenses policy, the more junior person will take whatever opportunities are presented.

    The CIFAS research also shows that if an employee is going to commit fraud then they will likely do so within the first 12 months of employment - and often within the first few weeks.

    While business fraud remains primarily something done by men, a 2005 study found that women still account for 18 percent of those employees convicted.

    CIFAS advises companies to take a more active role in searching for workplace fraud rather than waiting to deal with the consequences. They also promote better vetting procedures for new employees to check of any previous record of fraud.

    With a cloud-based expense management system such as webexpenses, claims can be monitored in real-time and alerts set to warn of any expenditures which stray outside of set limits.