The UK is witnessing a surge in fraudulent activities, with research highlighting a staggering 900 percent annual increase in deepfake videos and 64 percent of fraudulent filings involving identity fraud.

The proliferation of advanced technology is driving this shift, leading to a significant rise in hiring fraud that poses a serious threat to businesses globally.

Keith Rosser, Director of Group Risk and Reed Screening, discusses the alarming trend of recruitment-related fraud, which ranges from fake qualifications to the misuse of AI tools.

“Employers should be very worried about hiring fraud,” Keith warns. “With technological advancements and faster hiring processes, hiring fraud has accelerated at an unprecedented pace.”

Understanding Hiring Fraud

Reed Screening, in collaboration with the Better Hiring Institute and other partners, defines hiring fraud as any deceptive activity during the hiring process, committed either by individuals against organisations or by entities against jobseekers. This fraud can take many forms, including falsified credentials, fabricated work histories, identity theft, and impersonation.

“The tactics scammers use often deceive recruiters, leading to the unwitting employment of unqualified or dishonest individuals, which can have both financial and reputational repercussions for businesses,” Keith explains. “Technology has enabled criminals to exploit traditional recruitment processes, and organisations must adapt to avoid CV fraud, employment scams, manipulation of AI tools, and other tactics.”

Protecting Your Business from Hiring Fraud

Hiring fraud is becoming increasingly sophisticated and harder to detect. Keith outlines several types of fraudulent activities businesses should be vigilant about during the hiring process, and offers strategies to protect themselves.

  1. Reference Fraud “One of the biggest threats right now is ‘reference houses’,” Keith notes. These organisations provide fake references for candidates, often presenting contact details similar to legitimate companies and even creating websites to support the deception. Over 100 reference houses were identified in 2023 alone.

Keith advises businesses to scrutinise references carefully, asking questions such as:

    • Does the email address look official? Are there spelling errors or additional characters?
    • Do the dates of the reference match the employment history on the CV?
    • Does the referee’s job title suggest a position of responsibility?
  1. Manipulation of Artificial Intelligence “AI-generated interviews can be advantageous for applicants but bring disadvantages for employers,” Keith says. Tools like ChatGPT can help jobseekers craft compelling CVs and interview answers, potentially leading to the hiring of underqualified individuals. Advanced AI applications, including deepfakes, can further complicate remote hiring processes.

To mitigate AI-generated responses, employers can:

    • Utilise AI detection systems
    • Conduct competency-based interviews
    • Conduct face-to-face interviews, even for remote positions
  1. Dual Employment The shift to remote and hybrid work due to the COVID-19 pandemic has led to the rise of dual employment, where individuals work two jobs simultaneously, often breaching workplace rules and contracts.

“Dual employment can result in financial losses, increased risk of confidential data being shared, and reduced productivity,” Keith explains. He advises:

    • Revising employee agreements to restrict dual employment
    • Conducting overemployment monitoring checks during hiring
    • Regular screening checks for current employees in specific roles

What Should Businesses Do?

Hiring fraud also includes immigration, qualification, and CV fraud. “Detecting fraudulent applications has become increasingly challenging,” Keith notes. To safeguard their recruitment processes, employers can adopt several strategies.

Reed has partnered with the Better Hiring Institute and Cifas to launch a free guide, ‘Tackling Hiring Fraud: The UK’s Response to a Growing Problem’, which includes a checklist for human resources directors and chief people officers to ensure their organisation’s defences are robust.

“The main challenge for employers is that hiring fraud and the technology to combat it are continuously evolving,” Keith adds. “Outsourcing is often the easiest and most cost-effective solution.”

As many UK screening companies are now owned by global firms with less focus on the UK context, Keith emphasises the importance of choosing a UK specialist that is up to date and leading future policy, legislation, and systems needed to respond to this growing threat.

“Technology has enabled criminals to exploit traditional recruitment processes. It’s time for businesses to get ahead and protect themselves to avoid falling victim to hiring fraud,” Keith concludes.

 

 

 

 

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Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.