Leveraging CIFAS for Fraud Prevention

This is the fifth instalment in our 10-part series on unmasking insider fraud and implementing effective risk mitigation strategies.

In previous posts, we've explored the various facets of insider fraud and the importance of implementing robust risk mitigation strategies. Today, we turn our attention to CIFAS, the UK's leading fraud prevention service. Understanding what CIFAS is and how it operates can be a game-changer for organisations aiming to safeguard themselves against fraud. In this post, we'll explain CIFAS's role in fraud prevention, share key statistics, and outline how businesses can become members.

What Is CIFAS?

CIFAS (pronounced "see-fass") is the UK's largest cross-sector fraud sharing organisation. Established as a not-for-profit entity, CIFAS operates the National Fraud Database and acts as a hub where member organisations share and access information on known fraud cases. This collaborative approach helps in detecting, deterring, and preventing fraud across various industries.

CIFAS membership spans multiple sectors, including banking, finance, insurance, telecommunications, retail, and public sector bodies. By sharing data on fraudulent activities, members contribute to a collective defence against fraudsters.

CIFAS plays a pivotal role in combating fraud through several key functions:

1. Data Sharing

   Members report instances of fraud to CIFAS, which are then added to the National Fraud Database. This database is a rich resource that allows members to:

   Detect Fraudulent Applications: By checking new applications against the database, organisations can identify individuals with a history of fraudulent activity.

   Prevent Insider Fraud: data on internal fraud helps other members recognise potential threats during the hiring process.

2. Collaborative Intelligence

   CIFAS facilitates the exchange of fraud intelligence among its members. This collaboration enhances the understanding of emerging fraud trends and techniques, enabling proactive measures.

3. Education and Awareness

   CIFAS provides training, research, and guidance to help organisations and the public stay informed about fraud risks and prevention strategies

Understanding the scale and nature of fraud is essential for effective prevention. Recent CIFAS statistics highlight concerning trends:

15% Increase in Insider Threat Listings: There has been a significant rise in the number of insider fraud cases reported to CIFAS.

49% of Listings Involve Theft or Deception from the Employer: Nearly half of insider fraud cases are related to employees stealing from or deceiving their employers.

33% Due to CV Inaccuracies: A third of insider threat listings are the result of candidates providing false or misleading information on their CVs.

Rise in First-Year Fraud: There is an increasing trend of fraud committed by employees within their first year of employment.

These statistics underscore the importance of thorough pre-employment screening and the value of CIFAS membership in identifying potential risks

How to Become a CIFAS Member

Joining CIFAS involves a structured process to ensure that organisations are committed to the responsible sharing and use of fraud data.

1. Eligibility Assessment

   Organisations interested in becoming members should first assess their eligibility. CIFAS membership is open to entities that:

   • Operate within the UK.

   • Are committed to preventing fraud and financial crime.

   • Can comply with data protection regulations and CIFAS's strict data handling requirements.

2. Application Process

   The steps to apply for membership are as follows:

   • Contact CIFAS: Reach out to the CIFAS membership team to express interest and obtain application details.

   • Complete Application Forms: Provide necessary information about your organisation, including how you intend to use CIFAS services.

   • Compliance Review: Undergo a review to ensure your organisation can adhere to CIFAS's compliance standards.

   • Sign Agreements: Enter into a formal agreement outlining the terms of membership and data sharing responsibilities.

   • Implementation: Integrate CIFAS systems into your operations, which may include technical setup and staff training.

3. Membership Types

   CIFAS offers different levels of membership tailored to organisational needs:

   • Full Membership: For organisations that wish to both contribute to and access the National Fraud Database.

   • Associate Membership: For entities that primarily want to access fraud data without contributing their own cases.

Responsibilities of CIFAS Members

Membership comes with obligations to ensure the integrity and effectiveness of the data sharing system:

• Data Accuracy: Members must ensure that any data submitted to CIFAS is accurate and relevant.

• Compliance with Laws: Adherence to data protection laws, including the UK GDPR, is mandatory.

• Secure Handling: Implement robust security measures to protect the data accessed through CIFAS.

• Staff Training: Ensure that employees understand how to use CIFAS services responsibly and ethically.

Becoming a CIFAS member offers numerous advantages that enhance an organisation's fraud prevention capabilities:

1. Access to Comprehensive Fraud Data

   Members can search the National Fraud Database to identify individuals with a history of fraudulent behaviour, reducing the risk of onboarding high-risk employees or engaging with fraudulent customers.

2. Enhanced Fraud Detection and Prevention

   Sharing and accessing up-to-date fraud intelligence allows organisations to stay ahead of emerging threats and adopt proactive measures.

3. Compliance and Regulatory Support

   CIFAS membership aids in meeting regulatory obligations by demonstrating a commitment to fraud prevention and responsible data handling.

4. Networking and Collaboration

   Members benefit from being part of a network of like-minded organisations, enabling collaboration and sharing of best practices.

5. Training and Resources

   CIFAS provides access to training programmes, events, and resources that help enhance organisational knowledge and capabilities in fraud prevention.

Case Study: The Value of CIFAS Membership

During the webinar, Verifile highlighted the increasing risk of insider fraud, with a notable rise in cases involving CV inaccuracies. By utilising CIFAS data during the pre-employment screening process, organisations can identify discrepancies and potential red flags that standard checks might miss.

For example, if a candidate has been previously reported to CIFAS for employment application fraud, this information can be critical in making informed hiring decisions.

Integrating CIFAS Checks into Your Screening Process

To maximise the benefits of CIFAS membership, organisations should integrate CIFAS checks into their existing background screening procedures:

• Pre-Employment Checks: Include CIFAS searches as part of the candidate vetting process.

• Ongoing Monitoring: Regularly check existing employees against CIFAS data to detect emerging risks.

• Collaboration with Screening Providers: Work with background screening companies like Verifile, which can facilitate CIFAS checks efficiently.

Conclusion

Leveraging CIFAS for fraud prevention empowers organisations to take a proactive stance against the ever-evolving threat of fraud. By accessing shared intelligence and collaborating with other entities, businesses can significantly reduce their vulnerability to insider threats and financial crimes.

HR professionals and compliance officers play a crucial role in implementing CIFAS resources effectively. From enhancing pre-employment screening to ongoing risk management, the insights gained from CIFAS membership are invaluable.

If your organisation is not yet a member of CIFAS, now is the time to consider the benefits and take steps towards joining this collaborative effort against fraud.

In our next post, we'll delve into real-life case studies of insider fraud, exploring lessons learned and how organisations can apply these insights to strengthen their defences.

Stay tuned for Part 6: "Case Studies of Insider Fraud: Lessons Learned" coming soon.