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