New research reveals growing financial pressures are driving workers in the US and UK to manipulate expenses as employers face a new AI-powered fraud challenge.
Artificial intelligence is creating a new challenge for employers, with new research revealing that large numbers of employees are already using AI tools to generate fake expense receipts. According to research conducted by Atomik Research on behalf of Emburse, four in ten (40%) US employees admit they have used AI to create a fake business expense receipt, while almost three in ten (29%) UK employees say they have used AI to generate or manipulate receipts to supplement their income.
The survey, which questioned 2,000 professionally employed adults across the United States and United Kingdom, suggests that rising financial pressures and slow reimbursement processes are contributing to an increase in fraudulent expense claims. Key findings show that:
- 40% of US employees have used AI to create fake expense receipts.
- 29% of UK employees have used AI to generate or manipulate expense receipts.
- 27% of US workers admitted submitting personal purchases as business expenses due to financial pressures.
- 68% of UK employees say they have incurred bank charges after paying business expenses out of pocket.
- 63% of US employees use employer-funded AI tools for personal purposes.
RISING AI-POWERED EXPENSE FRAUD
Among US employees surveyed:
- 19% said they had used AI to completely fabricate a purchase.
- 15% admitted increasing the value of an existing purchase.
- 6% used AI to recreate a receipt they had lost for a genuine purchase.
The research also found that 40% of employees who generated fake receipts used company-funded AI tools to do so, while 9% said they had built their own AI tools for creating fraudulent receipts.
“AI makes it easier than ever to fabricate receipts and bypass traditional controls, so organizations need a more proactive, AI-centric approach to managing spend,” said Michele Shepard, Chief Revenue Officer at Emburse. “Organisations that aren’t leveraging AI will be at a significant disadvantage in finding and stopping these emerging threats.”
FINANCIAL PRESSURES DRIVING FRAUD
The study found a clear relationship between financial hardship and fraudulent expense claims. More than one in four US.employees (27%) acknowledged passing personal purchases off as business expenses because of their financial circumstances, while another 20% said they had considered doing so. Compared with similar research conducted in 2024, the proportion considering fraudulent claims increased by 11 percentage points.
The findings echo previous research, which shows that a majority of employees say financial stress negatively impacts productivity, highlighting the wider impact that money worries can have on both employee wellbeing and organisational performance.
Among employees who had previously submitted fraudulent expenses:
- 51% incurred overdraft charges, late fees or credit card interest while waiting for reimbursement.
- 23% delayed personal purchases or bill payments.
- 16% said expense claims take too long to process and would prefer to use a company card.
The research comes at a time when workplace stress is already rising. A recent report featured on Fair Play Talks found that UK and US workers are facing a burnout crisis as AI job insecurity and financial pressure drive rising stress.
UK WORKERS FEELING THE PINCH
The UK findings paint a similar picture. According to the research:
- 68% of UK employees have incurred bank charges after paying business expenses themselves.
- 61% wait more than a week to receive reimbursement.
- 51% say delayed reimbursements have caused financial strain.
- 73% would rather use a corporate credit card for business spending.
Marne Martin, CEO of Emburse, said the findings expose a growing workplace issue. “When companies require staff to cover business expenses upfront, the arrangement can effectively amount to an interest-free loan from employee to employer. Far too many employees are effectively subsidising business spending themselves, paying for work costs on personal cards and waiting to be paid back.”
The findings also align with previous Fair Play Talks reports that highlight financial insecurity is forcing many older UK employees to work longer despite facing age-related barriers in the labour market.
BROADER CONCERNS AROUND WORKPLACE AI GOVERNANCE
The research uncovered broader concerns around workplace AI governance. Nearly two-thirds (63%) of US employees said they use employer-funded AI tools for personal activities, while almost one-third reported that more than a third of their AI usage is unrelated to work.
Employees cited several reasons:
- 35% said personal AI use makes them more effective at work.
- 28% believe it helps them learn AI faster.
- 22% admitted using company-funded AI tools to search and apply for other jobs.
- 18% said their personal use was motivated by concerns that AI could eventually replace them in the workplace.
HOW TO REDUCE EXPENSE FRAUD WITHOUT DAMAGING TRUST
While organisations need robust controls to identify fraudulent claims, experts suggest that prevention is often more effective than punishment. The research indicates that financial stress and slow reimbursement processes may be contributing factors behind fraudulent behaviour, meaning employers should consider addressing underlying causes as well as strengthening compliance measures.
Speed up reimbursement processes
Long reimbursement cycles can leave employees out of pocket for days or even weeks. Faster expense approvals and payments can reduce financial strain and remove one potential incentive for employees to manipulate claims.
Increase use of corporate cards
Providing company credit cards or virtual cards for approved business expenses can minimise the need for employees to use personal funds. The study found that 73% of UK employees would prefer to use a corporate card for business spending.
Establish clear expense policies
Expense policies should be easy to understand, regularly updated and communicated consistently across the organisation. Employers should ensure staff understand:
- What can and cannot be claimed.
- The consequences of falsifying expenses.
- How AI tools should and should not be used in expense submissions.
- Where employees can seek clarification if they are unsure.
Create a culture of transparency
Employees are more likely to comply with policies when they understand why rules exist. Encouraging open conversations about financial pressures, reimbursement challenges and ethical concerns can help foster a culture of trust and accountability.
Introduce AI governance policies
As generative AI becomes more widely used in the workplace, organisations should develop clear guidance around acceptable use. Policies should outline whether employees can use AI tools when preparing expenses and make it explicit that altering or generating receipts constitutes misconduct.
Use technology to detect fraud early
AI-powered expense management systems can help identify duplicate receipts, unusual spending patterns and potentially manipulated documentation before claims are approved. As Shepard noted, organisations need “a more proactive, AI-centric approach to managing spend” as AI-generated fraud becomes increasingly sophisticated.
Support employee financial wellbeing
Because financial pressures appear closely linked to fraudulent behaviour, employers may also wish to review broader wellbeing initiatives, including:
- Faster reimbursement times.
- Salary advance schemes.
- Financial wellbeing programmes.
- Access to confidential employee assistance support.
- Regular reviews of travel and expense policies to ensure employees are not routinely left out of pocket.
Financial support initiatives may become increasingly important. Fair Play Talks previously reported that two-thirds of employers offer financial incentives to retain staff despite spiralling business costs, reflecting growing recognition that employee financial wellbeing directly influences engagement, productivity and retention.
AI EXPENSE FRAUD: SYMPTOM OF A BIGGER WORKPLACE PROBLEM
The findings suggest that expense fraud is no longer solely a compliance issue. Rising living costs, delayed reimbursements and growing financial pressures may be creating conditions where some employees feel justified in bending expense rules. While fraudulent claims can never be condoned, the research raises important questions about whether outdated expense processes are placing unnecessary financial burdens on workers.
The issue may also have implications for workplace culture and ethics. Fair Play Talks recently reported that one-third of employees fear retaliation for reporting misconduct, highlighting ongoing challenges around trust, transparency and psychological safety within organisations.
As AI tools become increasingly sophisticated, organisations may need to rethink not only how they detect fraud, but also whether their expense policies and reimbursement practices are fit for today’s workplace. After all, trust in the workplace is a two-way street.
RELATED ARTICLES
The vast majority of US-based workers (70%) believe that stress around financial wellbeing negatively impacts performance in the workplace.
New research highlights a workforce under sustained pressure, and a growing expectation for employers to move beyond awareness campaigns and take meaningful action on employee wellbeing.
A growing number of older UK workers say they do not want to retire – and many simply cannot afford to, a new study has revealed.
A new workplace ethics survey reveals that one-third of employees fear retaliation for reporting misconduct, while many feel pressure to compromise their values.
Sign up for our newsletter
