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Who’s looking after your company?
It never ceases to amaze me the amount of corruption, fraud and espionage that occurs within the so-called precise world of finance. Investments, pensions, mortgages – all pared down to the last penny, plus VAT of course, but whose signature is on the form? Who is that person really, working within your company, possibly dealing with someone’s life savings - pressing the very computer keys that spell…oblivion?
We all understand references – a piece of paper portraying dates and a formal phrase affirming previous employment. Compliance. There’s another word we all know. Sizeable organisations, with a reputation to uphold, will have a compliance procedure in place confirming the authenticity of references and, possible, qualifications. But what about the person? Is your company at risk from another malevolence, unseen and previously denied to you – a criminal record?
Due to the complexity of organisations and the internet, there has been a dramatic increase in employee risk with £5 Billion lost to internal fraud every year. Alarmingly, 85% of employees who commit the largest frauds are in their post less than one year. Therefore, the importance of placing ‘appropriate’ personnel within the financial services industry has never been more essential and there is important new legislation that employment agencies and employers alike must adhere to.
In February 2002, Ernst & Young completed a global survey on the extent of the risk and their findings were shocking. It was discovered that trusted, long-established, middle management being downsized around the world, left companies exposed to potential danger. The biggest offenders were management, with 30% of junior employees committing offences relating to fraud. This had an enormous impact on companies with their integrity, trust and competence laid bare.
No-one seems to know The Financial Services and Markets Act 2000 was incorporated into Part V of the Police Act 1997 during 2002.The Act includes measures that enable ALL organisations in England and Wales, irrespective of whether they are likely to ask exempted questions under the Rehabilitation of Offenders Act 1974 (Exceptions Order) 1975 to obtain criminal record information about prospective employees applying for a financial services position to disclose ALL of their criminal history, including convictions that have been ‘spent’. This is dealt with under the Disclosure process, using a Registered Body to the Criminal Records Bureau.
In addition, the FSA Code of Practice (cp133) is adamant this forms part of the fit and proper test for approved persons entering this industry. There’s no getting round it anymore and the consequences are dire. Wave goodbye to your Professional Indemnity Insurance, buildings insurance, and say hello to civil litigation and, potentially, criminal prosecution.
Don’t even think about using an employment agency to offset the responsibility – they’re now just as accountable, with the onus now placed on them via the Conduct of Employment Agencies and Business Regulations 2002, to prove they have taken all reasonable steps to validate the identity and carry out all legislative criteria available to them. Watch out for the demise of online recruitment companies who do not ‘see’ the candidates at all!
The Mortgage Watchdog employs one of the UK’s leading vetting companies, Civil & Corporate Security, for the strategic end of the process, providing complete background profiles, recruitment expertise, corporate due diligence, medical screening and criminal record checks in the UK and abroad. We are absolutely certain that each of our agents is fit to perform their function in every way possible. I see this as a fantastic asset, adding specific value to my organisation.
Companies that can exhibit a thorough knowledge of critical legislation and how to incorporate it into their recruitment processes will serve to augment their reputation and gain a competitive advantage over those who procrastinate or simply do not know. Undoubtedly, organisations that use their responsibility as a tool will develop their business, remaining ahead of the competition.
We don’t have to like it, we simply have to do it. Security, in today’s society, at each step of the organisational structure is especially vital, and the architecture is there to help us perform a full recruitment inventory and produce evidence of validation. There are no more excuses.
I know who’s looking after my company… do you?
Monty Burn
www.mortgagewatchdog.com
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