Employee Theft Costs U.S. Businesses $50 Billion per Year
According to a Hiscox study, U.S. businesses affected by employee theft lost an average of $1.13 million in 2016. Small and midsize businesses accounted for 68 percent of cases, and their median loss last year was $289,864.
The most common embezzlement scheme was funds theft (34.5 percent), followed by check fraud (22.1 percent). Seventy percent of all check fraud occurred at companies with fewer than 100 employees.
Many of the frauds, particularly high-loss cases, involved diverting small sums of money over a long period of time – in 28.7 percent of cases, the employee theft took place for more than five years – which makes detection challenging.
The average loss for cases that continued for five years or more was $2.2 million. For cases lasting longer than 10 years, the loss grew to $5.4 million.