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What’s the 10-10-80 rule of business fraud?

On Behalf of | Aug 13, 2020 | Employment Law For Employers

You’ve known most of your employees for years. Some of them have been with you for decades. You can’t believe that these people would ever steal so much as a dollar, let alone embezzle from the company, right?

Well, it’s time to rethink that idea. Fraud prevention experts say that every business is susceptible to fraud based on the 10-10-80 rule. Basically, you’re right that some of your employees would never steal from you — about 80% of them. However, about 10% of people will steal simply because it’s in their nature and another 10% will steal from a company if they’re presented with the right opportunity.

If you’ve been in business for a while, you’ve probably gotten adept at spotting the 10% of employees who will automatically try to steal from you. You weed them out fast. But what about the other 10%? The characteristics of someone who may steal from you given the right opportunity may surprise you. They’re most likely:

  • Long-term employees that you trust
  • Dedicated workers who seldom take a day off
  • Have control of an important operation or function

Someone could be masking the fact that they’re unhappy with the company, upset about what they believe is unfair treatment or simply feel entitled to take a little extra because of all they contribute. They may be hiding significant personal problems, like a gambling addiction or other financial woes.

Fraud and embezzlement generally comes from the people in a company that are trusted the most. If it happens to your company, make sure that you take the necessary steps to protect your clients and your company’s reputation. An experienced advocate can guide you.

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