Employee Fraud Becomes an Added Concern for Today’s Small Businesses

By Michael Klazema on 3/29/2012

As if the slow economy wasn’t already enough for small business to deal with, they now have to keep a closer watch over their employees.  According to the Wall Street Journal, employee theft, fraud, and other crimes are rising among small businesses.  They attribute this to the struggling economy, saying that when employees struggle, they turn to their workplace for fast cash.

One business owner in particular, owner of Page and Palette Inc., found that vendors would no longer extend her credit for books her struggling store was running low on.  At first, she assumed it was because of the economy.  Months later, she found that her bookkeeper had been using company money to pay for their personal spending.  After $150,000 in discovered losses, the employee was charged with 25 counts of forgery.  If this kind of activity goes unnoticed long enough, employers like this either have to shut down their businesses or reduce their workforce.  Ultimately, this hurts the business and all of its employees. 

Many employees who give in to this kind of temptation have done it in the past.  While some employers do require background checks to prevent hiring criminals, small businesses don’t tend to spend money in this regard.  They might find however that by investing in comprehensive criminal background checks, they could save more by not losing as much to criminals they’ve unknowingly hired.

Small businesses already using background checks, but who have missed criminal activity among their employees could find it surprising that their current checks only use one database or do not seek crimes committed out of state.   By expanding procedures to include affordable products that have national focus like's US OneSEARCH, they can prevent hiring employees convicted of crimes like fraud and theft whether in or out of the state.  They might also consider including US AliasSEARCH in case a potential hire has changed names.

Small businesses would be wise to partner with comprehensive background check companies like for employement background screening.   As a leader in the criminal data aggregation industry, we have over 12 years of experience bringing together the information businesses need and currently offer instant database searches providing you access to over 300 million records from more than 600 sources.  Although we do serve Fortune 500 firms, we certainly can create flexible plans for small business budgets too, offering a variety of packages that allow any company to hire only the kind of employees that will help their business grow.

About - - a founding member of the National Association of Professional Background Screeners (NAPBS®) - serves thousands of customers nationwide, from small businesses to Fortune 100 companies by providing comprehensive screening services.  Headquartered in Dallas, Texas, with an Eastern Operations Center in Chapin, S.C., is home to one of the largest online criminal conviction databases in the industry. For more information about backgroundchecks’ offerings, please visit


For more information about our authors, click here.


Tag Cloud
Recent Posts

Latest News

  • June 14 Ban the box laws aim to improve opportunities for employment. Could they have the opposite effect instead?
  • June 13 Jacobs Petroleum Products is a regional petroleum company that operates throughout Pennsylvania, West Virginia, Ohio, and Maryland. Apart from their employees carrying much responsibility and have frequent contact with customers, the company’s hiring also tends to be segmented since individual store managers are responsible for hiring talent for their own stores. In this employment landscape, Jacobs Petroleum Products needed a reliable and effective way to screen its new hires for criminal infractions and other red flags.
  • June 12

    The University of Wisconsin System may tweak its hiring and reference check processes. The potential changes come after one of UW’s assistant deans was accused of sexual harassment.

  • June 07 Stories of abuse by coaches in youth sports leagues continue to crop up around the country, but rules and guidelines remain patchy and enforcement is often lacking. The struggle to implement an effective system continues nationwide.
  • June 07 Financial background checks, usually referred to as credit history checks, can be an effective way to find out if a candidate is fit to handle accounts, financial data, and other assets at your business.
  • June 06 The Society for Human Resource Management and the Charles Koch Institute recently commissioned a survey to find out how willing employers were to hire people with criminal records. The study indicates that managers, HR professionals, and employees themselves are becoming more comfortable with the idea of hiring and working with ex-offenders.
  • June 04 Are fingerprint background checks the gold standard for employee screening, or are they overhyped? We look at some of the myths and misconceptions surrounding these checks.
  • June 04 The organization, The Family Resource Center of North Mississippi (FRCNMS) was founded on the belief that families are the heart of community and that promoting healthy families leads to healthy communities. Read more about how they carefully screen and vet new employees with the help of
  • June 01 Past mistakes can have lingering effects in criminal records that appear on background checks. People with minor convictions can erase those mistakes for help starting over. 
  • May 29 The city of Greenley, Colorado has added background checks and new affidavits to its process for screening candidates for city council. The new measures come after a candidate with a felony conviction for forgery got elected as city councilman.