What are the key recruitment fraud risks?

16 Apr 2023

With vacancies sharply peaking to their highest level in the UK in 2022 and showing only a slow decline in the first few months of this year, teamed with low unemployment at 3.8%,  the competition for talent is still strong. This can, unfortunately, be seen as an opportunity for applicants to provide false or misleading information in support of their applications. 

In this article, we explore some of the areas that recruitment businesses should be aware of to protect their client organisations from the risk of increased exposure to recruitment fraud and the risk of Home Office fines if organisations are found to have employed an illegal worker having not undertaken the appropriate due diligence.

Additionally, those who have successfully been appointed after a false representation or failure to disclose at the recruitment stage, are more likely to go on to commit fraud or other misconduct within the organisation.  This can lead to not only a direct financial cost, but the cost of further staff absences/suspension, disciplinary, external sanction costs, replacement cover, investigation and other costs. So it’s key to apply the appropriate checks at the right time.

Recruitment fraud

There are several types of fraud within recruitment, which can occur at various stages of the process. We focus on some examples where the applicant can commit fraud in order to secure employment.

1. False qualifications

The act of falsely claiming to possess certain academic or professional qualifications or certifications to gain an advantage or obtain a job, promotion, or other benefits. This can involve presenting fraudulent documentation, falsifying academic records or misrepresenting the nature or extent of education or professional training and grades.

Prevention

Employers should implement robust screening processes and verification procedures to ensure that candidates' qualifications and credentials are legitimate. This can include conducting thorough background checks, verifying educational and professional references, and requiring candidates to provide original documentation to support their claims.

2. False references

This fraud occurs when a job candidate provides a reference who is not a legitimate previous employer or provides the contact information of a real previous employer but provides false information about their job title, responsibilities, or performance in order to boost their chances of getting hired.

Prevention

Employers should carefully check references, conduct background checks, use a third-party verification service, require original documentation and verify contact information.  Work references should only be accepted from professional email accounts.

3. CV fraud

This is the practice of job seekers falsifying or exaggerating information on their CV. This can include fabricating work experience, education, skills, or achievements. The goal of CV fraud is often to appear more qualified for a job or to secure a higher salary.

Prevention

Employers can take the following steps:

  • verify information by conducting background checks and contacting references;
  • check gaps in employment history and ask job candidates to explain any discrepancies;
  • require original documentation;
  • ask specific questions about the candidate's job responsibilities, achievements, and skills to ensure that the information provided is accurate; and
  • use technology such as Applicant Tracking Systems (ATS) and AI-powered CV scanners to help detect inconsistencies or discrepancies in the CV.

4. Undisclosed convictions

Undisclosed convictions refer to a situation where an individual fails to disclose their previous criminal convictions or charges when asked during an employment application, security clearance or background check process.

This type of fraud can be a serious issue, especially in certain job roles or industries where a criminal record could have an impact on safety, security or trust.

Prevention

Employers can implement thorough background check policies and require candidates to disclose any past convictions or charges. It is also important for candidates to be truthful and transparent during the application process to avoid any potential legal or ethical consequences.

5. False claims for registrations/memberships

Falsely claiming to be registered or a member of a professional organization in their field. This can include claiming to hold a certification or license that they do not have or exaggerating the level of their membership in a professional organisation.

Prevention

Employers should verify the information, ask for proof, check expiration dates and conduct background checks.

6. False ID and imposters

This type of fraud involves either fabricating an ID or stealing the identity of a legitimate job seeker and using their personal information to apply for jobs, often in a different location. Once hired, the perpetrator may steal money or sensitive information from the employer.

Even if the ID is legitimate, the individual who either presents themselves at the interview or for their first working day may be different. 

Prevention

Employers should verify the original ID, check work eligibility, conduct background checks, use technology (biometric scanners and facial recognition) and train recruiters on how to identify false ID and properly identify work eligibility. ID should be checked on the first working day that was presented as part of the recruitment process.

7. Failure to disclose financial information

Candidates withholding or misrepresenting financial information such as bankruptcies, judgments, or other negative financial history during the recruitment process. The goal of this type of fraud is often to hide financial problems or gain a job where financial trust is important.

Prevention

Employers should include financial disclosures in the application process, conduct background checks that include a review of a job candidate's financial history and verify the accuracy of financial information, such as contacting references or credit reporting agencies.  Employers should also educate recruiters about the importance of obtaining financial information and how to properly handle the information in accordance with the law.

Conclusion

The areas of fraud explored above can amount to a criminal offence and should be handled in the correct manner to ensure that the perpetrator is sanctioned for their attempts and to also prevent them from similar approaches elsewhere. As with any fraud, prevention is better than cure - and less costly financially and reputationally.  Whilst the above prevention measures are vital, the key is ensuring that staff are equipped to apply the adequate processes and trained in reviewing identity documentation, with an awareness of the risks.

To discuss the impact of fraud risk for your recruitment business, please contact Erin Sims.