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

  • December 04 Chicago Public Schools has dismissed hundreds of employees, coaches, vendors, and volunteers based on background check findings. The district recently vowed to re-check the majority of its 68,000 employees after a Chicago Tribune investigation revealed holes in its background check policies.
  • November 29 Striving to create a safer environment more conducive to productive training and leadership development, the Army has recently moved to adopt a uniform policy of background checks for certain roles. 
  • November 27 California’s biggest public school district is waiving the cost of volunteer background checks. The move is meant to encourage more family - and community members to get involved with the school district.
  • November 22 Contractors play an important role in the workforce, delivering services to both individuals and organizations. Vetting contractors for suitability continues to be a challenge, as two recent articles prove.
  • November 21 When it comes to background and pre-employment checks, it can be instructive to look at the characteristics of the ten most massive U.S. employers.
  • November 20 The #MeToo movement is bringing about legislative changes employers need to know about. We review some of the laws recently passed in California.
  • November 19

    Will a criminal conviction show up on your background check forever? In most states, there is a year limit for how long background check companies can report older criminal information.

  • November 15

    Replacing an inconsistent array of procedures, Ontario's government has passed into law a reform act intended to clarify how police departments should handle requests for information to be used in background checks. 

  • November 14 The federal government has vowed to cut its backlog of security clearance background checks in half by spring. Currently, the backlog is approximately 600,000 names strong.
  • November 12 To ensure the best hires, DFWSPF has implemented a stringent employee screening process—one that includes background searches through