Employee collusion is a form of insider fraud in which staff work together, or with customers, suppliers or criminals outside the firm, to steal, falsify records or help others launder money. It is dangerous because it defeats the most common internal control, segregation of duties. A payment that needs one person to enter it and another to approve it is safe against either acting alone, but not against both acting together.
Typical cases include a clerk and an approver paying invented suppliers, a buyer taking kickbacks from a vendor, bank staff opening accounts for money mules, and traders coordinating with back-office staff to hide losses. Defences include job rotation and mandatory leave, monitoring of staff accounts and overrides, data analysis for links between employees and counterparties, pre-employment screening and a trusted whistleblowing framework. Suspected cases go to internal fraud investigation. A related risk in card acquiring is merchant collusion.