Smoke, Mirrors and Fake Credentials

August 20th, 2010 2-3pmKevin Connell

CEO & FounderAccuScreen.comwith Guest W. Barry Nixon, SPHR

Executive Director for The National Institute for Prevention of Workplace Violence

Your PresentersKevin Connell CEO & Founder of AccuScreen.comFormer Director of the National Association of Professional Background Screeners (NAPBS)Co-Author, Secrets of Peak PerformersGuest Speaker - W. Barry Nixon, SPHR, COO, PreemploymentDirectory.comCo-Author, Background Screening & Investigations: Managing Hiring Risks from HR and Security Perspectives (available on Amazon.com)Co-Chair, International Committee, National Association for Professional Background Screeners (NAPBS)

Contributors to the Problem

Environmental Dynamics

High unemployment, mortgage crisis and mass layoffs

Record levels of employee fraud, information and property theft

Easy access to fake credentials

Conflicts and violence in the workplace

Increased need to hire the right person

Employees Facing Increasing Financial Hardships

High Unemployment9.3% of the labor force - Not seasonally adjusted - May 2010 (Source: U.S. Bureau of Labor Statistics)

Mortgage CrisisForeclosure filings were made on 322,920 U.S. properties in May while Bank repossessions hit a record monthly high for the second month in a row, totaling 93,777--up 44% from last year. (Realty Trac )

Mass LayoffsIn May, employers took 1,412 mass layoff actions involving 135,789 workers. The number of events decreased by 444 over the month, and associated initial claims decreased by 65,081. (Source: Bureau of Labor Statistics)

Increasing Financial Hardships Increases Risk of Fraud

Employees coping with a spouse who has been laid off, a sick family member, eroding 401K or a home at risk of foreclosure are more likely to engage in risky behaviors to augment their incomes. Fear is another reason for the increase in fraud. When companies decide to lay off workers and employees start to worry, they think of ways to protect themselves. As people are put under greater and greater emotional stress and financial pressures, they may lose their moral compass and do things and take funds, data and property that, in normal circumstances, they might not otherwise do.

Fraud is on the Increase

American organizations lose an average of 7% of their revenues to occupational fraud.

The cost of fraud in the U.S. is estimated at $6 billion annually.

64 percent -- is committed by employees

Source: Association of Certified Fraud Examiners

Fraud:Any illegal acts characterized by deceit,

concealment, or violation of trust. These acts are not dependent upon the threat of application of threat of violence or of

physical force. Frauds are perpetrated by individuals and organizations to obtain

money, property, or services; or to avoid payment of loss of services; or to secure

personal or business advantage.

Fraud:Any illegal acts characterized by deceit,

concealment, or violation of trust. These acts are not dependent upon the threat of application of threat of violence or of

physical force. Frauds are perpetrated by individuals and organizations to obtain

money, property, or services; or to avoid payment of loss of services; or to secure

personal or business advantage.

Identity Theft Running rampant

Identity theft continues to be the number one complaint for the seventh year in a row in the US according to Federal Trade Commission (FTC) records.

Approximately 12% of data breaches which are at record levels are malicious.

‘Gigabyte gangs’ placing their own people in jobs for the specific purpose to steal confidential information.

The Liars Index®

The Liars Index® reached 21.43% for the first six months of 2010."This latest increase in the Index is the highest in some ten years.“The current data parallels the increases during the 2000-2001 recessionary period.

Fake Degrees & Diplomas

Access to Fake degrees

Diploma MillsEstimates are that there are 700 diploma mill companies in the U.S. and as many as 3,000 mills are in operation worldwide.

Council for Higher Education Accreditation (CHEA) in Washington, D.C., maintain lists of accredited colleges and universities. (Tip: Have your employment screening firm verify that an applicants degree is from an accredited school?)

Two types of mills—ones that issue degrees from bogus or nonexistent schools and ones that sell fake degrees from legitimate and well-known colleges.

Access to Fake Credentials

Verification servicesSeveral degree mills provide official-looking

transcripts and a toll-free number to confirm attendance and course completion.

Diploma Mills

\ Diploma Mills

Dear Kevin,

Further to our telephone conversation, I am pleased to be able to confirm the following:

You will receive:M B A DegreeYour degree package will include:•* Your diploma•* A laminated, wallet-sized copy diploma•* Transcripts•* Two Letters of recommendations from Professors

In addition, and most importantly, you will receive unlimited support from us, which includes verification of your credentials to prospective employers.Your total investment is US $2000.00. (Including your $500.00 discount for the scholarship pro gramme)However have managed to get you an additional scholarship of $1150,00.Therefore your full price for the MBA WILL ONLY BE $850

The diploma is patterned after;and looks very much like UCLAs in its design.This diploma as i explained to you would have been done on line for the last few years and you have now completed the on line degree.The dates of your graduation will be tailored to your needs.

My phone number is 001 646240 4276If you have any questions please feel free to call me 24 hours a day or e-mail me at the above address.I will phone you in the next half hour. Find attached samples.Our web site is www.earlstownuni.orgBest RegardsPete Miles

Sample UniversityStudent Name: Degree Program: MBAStudent ID: Graduation Date: June 6, 2003

AUTUMN QUARTER 2001ACC 520 FINANCIAL ACCOUNTING A-ECO 570 MANAGERIAL ECONOMICS A-MTH 500 INTRO MANAGERIAL STATISTICS 3.0 AENG 510 EFFECTIVE WRITING SKILLS FOR MANAGERS B

WINTER QUARTER 2002ACC 521 MANAGERIAL ACCOUNTING ABUS 546 ORGANIZATIONAL BEHAVIOR AMTH 520 ADVANCED MANAGERIAL STATISTICS AFIN 531 FINANCE I: ASSET VALUATION, RISK & RETURN A-

Study Shows Government Employees have Bogus Degrees

A 2004 study conducted by the U.S. Government Accountability Office (GAO) found that 463 federal employees had received bogus degrees from diploma mills. Several held sensitive positions that require high levels of technical skill. The GAO researchers concluded that the U.S. government had spent more than $150,000 in tuition reimbursements to employees receiving fake degrees. The GAO report went on to state that the problem could be more pervasive than research reveals.

Is There a Problem?Most HR professionals acknowledge that degree or diploma mills pose challenges for employers, but most quickly add that it is not a problem within their organization.

Participant Survey

How many of you have discovered an applicant or employee that has a fake credential, e.g., diploma, degree, certification, etc.?

States Outlaw Diploma Mills

In 2003, Oregon became one of the first states to pass a law making it illegal to use or sell bogus degrees. Anyone in Oregon who uses a false academic degree to obtain employment violates state law and can be subject to a fine and sometimes imprisonment. Seven other states followed Oregon’s lead with laws either outlawing diploma mills or limiting use of bogus degrees.

Texas Penal Code (Section 32.52)

Prohibits the use of fraudulent or substandard degrees "in a written or oral advertisement or other promotion of a business; or with the intent to: obtain employment; obtain a license or certificate to practice a trade, profession, or occupation; obtain a promotion, a compensation or other benefit, or an increase in compensation or other benefit, in employment or in the practice of a trade, profession, or occupation; obtain admission to an educational program in this state; or gain a position in government with authority over another person, regardless of whether the actor receives compensation for the position."

Fake References

Fake References in India

KPMG India identified almost 150 firms that are fictitious companies.

During our background verification process for clients over the past one year, we found 250 firms that fake experience letters, salary slips and relieving letters to candidates,” added Abhay Aggarwal, chief executive of Integrity Verification Services Pvt. Ltd.

FAKE REFERENCES

FAKE REFERENCES

FAKE REFERENCES

Background Checks Have Limits

Is it difficult to verify beyond a shadow of doubt that a company giving a reference is legitimate?

Fake Resumes

A fake resume is one in which a specific alteration of your employment history is made in order to deceive a human resources person or hiring authority in order to get hired.

http://fakeresume.com/Introduction_to_a_Fake_Resume.html

Access to Fake Resumes

Threat Assessment Begins Before You Make a Hire

According to the SHRM Workplace Violence Survey the leading motivations for workplace violence are:

#1 Personality Conflict#2 Emotional problems/mental illness#3 Family/marital/personal relationship issues#4 Firing/Termination

#5 Work related stress

#6 Drug/alcohol use

#7 Financial/legal difficulties

#8 Poor performance review

Most of these above behaviors can be detected with a thorough background and reference check.

Protecting Your Company Against Fake Credentials

Crucial Success Factors“Making the right hiring decisions and reducing avoidable risk are two of the most crucial success metrics for employers.”

Background Screening & Investigations: Managing Hiring Risk from a HR and Security Perspective

Verification is Critical

Good source to help is the Council for Higher Education Accreditation (CHEA) in Washington, D.C. which maintain lists of accredited colleges and universities.

These list can be very useful when making sure that an applicant or subsequently an employee has earned a degree from a legitimate source. The process of checking can save a business thousands of dollars when reimbursing employees for tuition costs or from costly mistakes made by someone who has bogus credentials.

A critical step that all businesses need to take is to establish a written policy clearly specifying that only accredited schools qualify for hiring or tuition reimbursement. “Employers need to say upfront and in writing that if the job requires a college degree that the degree must be from an accredited institution.”

Participant SurveyHow many of you have a written policy that requires college degrees and education certificates to be issued by accredited institution?

One in five employers actually have a written policy that requires college degrees and educational certificates to be issued by an accredited educational institution.

The Best Defense, is a Great Offense

1.Verify required education and credentials.

2.Verify degree granting institution is accredited from a valid source.

3.When verifying education don’t stop your research just because someone answers your questions on the phone or responds with a letter.

4.Check schools’ web site for the following:

Tuition is charged on a per degree basis rather than per credit, course or semester.

There are few or unspecified degree requirements.

The emphasis is on degrees for work or life experience.

The Best Defense, is a Great Offense

5. Check resumes and application for these clues:Out of sequence degrees (e.g. applicant claims to have a Ph.D, but does not have a bachelors or masters degree).A degree earned in a short time period or several degrees listed for the same yearDegrees from schools in locations different from the applicant’s job or home.If an institutions has name similar to a well-known school located in a different state check its credentials.A degree from a foreign university in a country where the applicant never lived.

The Best Defense, is a Great Offense

6. A thorough due diligence on the front end will save you from problems on the back end.

7. When verifying references call the company’s general number and ask for the person. Do not simply call the number the applicant gave you.

8. Use online reference checks to get true anonymous feedback that is competency based.

In Summary

Pre & Post Hire Screening is a critical step in helping you to select the right people for your job openings.

Screening helps to mitigate risk of:Increasing your costs with bad hires

Hiring people with wrong competencies due to use of Fake credentials

Litigation

Employee Fraud

Identity, Information and Property theft

Workplace violence

Please join us next Wed. 8/25 @ 2:00 PM EST fora Complimentary Webinar:

“Employee Screening Rights: 3 Must Know Rules to Avoid the Wrath of the EEOC”

800-689-2228 Ext 1100www.accuscreen.com/media/webinars

Register Today! Limited Space!

Kevin Connell AccuScreen.com

Next Wednesday August 25th

2:00 PM Eastern 11:00 AM Pacific

Resource CenterAccuScreen.com- for the FCRA Compliance Guide AccuScreen.com/ebook - Secrets of Peak Performers PreemploymentDirectory.com – a comprehensive source for finding a background screening firm.Background Screening & Investigations: Managing Hiring Risks from HR and Security Perspectives, Barry Nixon and Kim Kerr (available on Amazon.com)Accredibase – comprehensive database of diploma mills worldwide; regularly updated Oregon Student Assistance Commission’s Office of Degree Authorization – www.osac.state.or.us/odaUS Dept of Education – www.ope.ed.gov/accreditation

For more information contact:Kevin Connell, CEO & FounderAccuScreen.comKevinConnell@AccuScreen.com813-837-1920

W. Barry Nixon, SPHR, Executive DirectorThe National Institute for Prevention of Workplace Violencewbnixon@aol.com