Employee who fell for fraud doesn't have to refund employer

Employee who fell for fraud doesn't have to refund employer


  • Date: Thursday 21st November 2019
  • PDF: Download

A recent ruling in the case of Reilly v Peebles Media Group reminds us of the importance of hierarchical structure in organisations:

In summary, Ms Reilly was left in charge while her bosses were on leave, and fell victim to a ‘whaling’ scam, that targets junior members of staff. In the process, she transferred a total of £200,000 into scammers accounts, the majority of which were not recoverable.

The court ruled that there needs to be a general acceptance that companies, as much as individuals, can be subject to fraudulent activities and employees cannot be held responsible for making a mistake when they haven’t acted grossly negligent.

What you can do:

  • Ensure that you have clear internal guidance in place when it comes to how payments are made. Introduce a 4-eyes sign-off, thereby preventing any erroneous action.

  • Train and educate your staff on the importance of vigilance and provide regular updates on scams that may be prevalent.

  • Review your levels of authority within your organisation and ensure that an appropriately senior member of the team is available at all times.

Source: People Management


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