It’s the Season for Giving … And Taking



Experts Warn on Fraud During Holiday Shopping Season, Offer Tips for Protection

AUSTIN, Texas (Dec. 5, 2013) – With increased financial pressure causing fraud to take an estimated 20 percent uptick during the U.S. holiday shopping season, the Association of Certified Fraud Examiners (ACFE) reminds business owners and management to take a preventive stance to lower their risk.

In a survey conducted by the ACFE last year, Certified Fraud Examiners (CFEs) cited increased financial pressure as the leading reason fraud takes an estimated 20 percent uptick during the holiday season. A majority of these experts indicated that employee embezzlement is the type of fraud most likely to increase during this period.

In response to the heightened fraud risk, the ACFE recommends organizations take the following measures for decreasing vulnerability:

1. Be proactive.

Fewer than 7 percent of survey respondents said their organization, or their clients’ organizations, increase their level of resources committed to fraud prevention or detection during the holidays. Be vigilant and put increased emphasis on monitoring internal controls. Maintain a clear segregation of duties, such that one employee is not in charge of multiple levels of cash-handling or inventory control. Emphasize the employee code-of-conduct during the holidays, and/or make clear that the company will not tolerate any unethical behavior.

2. Follow established hiring procedures for seasonal employees.

While many retailers respond to an urgent need in hiring seasonal employees, the same formal employment guidelines should be followed as during other times of the year. These should include conducting thorough background investigations: check educational, employment and credit history (as permitted by law), as well as references.

3. Train employees in fraud prevention.

Full-time, part-time and seasonal employees should be trained in fraud prevention. Are employees aware of procedures for reporting suspicious activity by customers or co-workers? Do workers know the warning signs of fraud? Ensure that staff know at least some basic fraud prevention techniques.

ACFE President and CEO James D. Ratley, CFE, said that the time is now for organizations to protect themselves from fraud.


“The CFEs who participated in our survey overwhelmingly reported seeing an increase in fraud during the holidays,” Ratley said. “Yet most of them also indicate that their organization does not increase efforts to prevent or detect fraud during this time.

“The reality is that companies may be more vulnerable than they realize during our traditional shopping season,” Ratley said. “Especially during a difficult economy, employees might find themselves spending beyond their budget; or, an expected holiday bonus may be decreased or unrealized altogether.”

About the Association of Certified Fraud Examiners
The ACFE is the world's largest anti-fraud organization and premier provider of anti-fraud training and education. Together with nearly 70,000 members, the ACFE is reducing business fraud world-wide and inspiring public confidence in the integrity and objectivity within the profession.

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