Fraud Recovery: A Pragmatic Alternative with Mediation 


More than 90% of businesses, charities and public sector organisations experience losses through fraud. Fraud can involve data theft, office equipment losses, invoice irregularities, specious customer claims to avoid payment, insurance fraud, miscounting stock, false cv claims to win jobs or earn more and many others. Yet the majority of victims fail to take effective action to deter, prevent or tackle issues effectively. The hassle of court time, legal costs and negative publicity for victims gives fraudsters the licence to continue to deceive others.

hammer-1537123_960_720CRIMINAL AND CIVIL LAW

The problem is exacerbated by lack of sufficient criminal evidence to allow victims to hand over cases to the police. Even if they do the police often are unable to prosecute for lack of evidence.  This evidence is usually locked up in the mind of the fraudster who recognises that disclosure can result in significant financial penalties or imprisonment. The saying goes “do Turkeys vote for Xmas?”.

The option of civil litigation also has risks. Legal investigations are time-consuming and expensive. If the court is unable to find in favour of the plaintiff who brings the action, the defendant may counter-claim for costs and other losses. Defendants may also subsequently continue to damage the reputation of the plaintiff and withhold unrecovered assets. Criminal and civil litigation options are seen as too risky by most employers. The outcome is a problem which escalates.


It is widely proved that when a criminal or suspected criminal is granted immunity from prosecution they disclose matters which result in recovery of losses and prevention of future losses. There are countless examples of computer data hackers being recruited by their victim organisations to plug gaps, stop losses and more effectively manage a problem which otherwise re-occurs.

The offer of mediation without prejudice to formal legal proceedings is a potential solution for both parties. Fraudsters in the workplace often act as a result of perceived alienation. They may have been refused a pay rise or a promotion, or believe they have been unfairly treated in other ways. Fraud is “fair payback” in their minds.

The dilemma for employers is to balance the short-term desire for “justice” with the “greater good” of reduced risk and business continuity for long term prosperity. If fraud is suspected but difficult to prove, then a mediator experienced in fraud prevention can prove to be a fairer and a more sustainable option for all parties.

For more info contact Clive Bonny Clive@consult-smp.com 01273 3088656

Clive is trained in fraud prevention, background personnel security vetting and risk management. He has advised the prison services on process improvements, and police services on ethical decision-making and dilemma management.