Exaggeration, embellishment, deception and even fraud. Some people will stop at nothing to get a job. So how can a small business, without time and money for lengthy selection processes, be sure a candidate is telling the truth?

TV chef Robert Irvine hit the headlines in March this year when it emerged that his claims of royal connections weren't all they were cracked up to be. It seems he was not, after all, responsible for making and decorating Charles and Diana's wedding cake and he'd not been given a Scottish castle as a present from the Queen. Unsurprisingly, after finding out that Irvine had been telling tales, his contract with the US cable channel Food Network was not renewed.

Irvine is but the latest in a long line of successful people who have built their careers on fibs, been found out and then fallen ignominiously from grace (see below). The question employers have to ask is: how many more are there like them?

It's not an easy one to answer. In 2007, the management consultancy the Risk Advisory Group screened over 3,800 CVs and found that more than 50 per cent contained "inaccuracies". While Sal Remtulla, the company's head of employee screening, says many of these will be "honest" mistakes, she warns: "A significant number will be something more serious, such as bankruptcies, criminal convictions or even fraud against previous employers." The risks these pose to businesses—in both monetary and PR terms—are obvious.

Remtulla adds that the number of CVs containing multiple lies was higher in 2007 than in 2006 and cites this as evidence of the increasingly tough job market. She says: "It's clear the temptation for exaggeration or straightforward lying is escalating".

But Vanessa Robinson, HR adviser at the Chartered Institute of Personnel and Development (CIPD), says: "These days, there is a lot more information that people can access easily, so I think it [lying on CVs] is less of a problem than it used to be."

Research from Powerchex, which vets candidates for financial services clients, suggests fewer people are lying to get jobs in the industry. Just 13 per cent of the CVs it screened contained a discrepancy in 2007, compared with 31 per cent in 2006. Managing director Alexandra Kelly says this is because financial services is a highly regulated sector, and its employees now expect their CVs to be checked out.

Less well-regulated industries may not be seeing the same reduction in CV lies. If you don't want to use a CV screening service, how can you be sure candidates are what they claim?

Remtulla's advice is simple: "due diligence". She says you should always check references, no matter how time-consuming it seems, and that you should never be afraid to ask for proof. "If they say they have an MBA, ask to see the certificate that proves it."

Will Clayton, employment partner at lawyers Hill Dickinson, has another tip: "Ask candidates to sign a written declaration to confirm the truth of their application." This will deter those tempted to make things up.

One message is clear: never rely on instinct alone. Kelly at Powerchex tells a cautionary tale: "It happened to us just the other day; we were taking someone on, and I really liked the guy. But we don't start people until they've been checked out. Anyway, it turns out this guy had repeatedly stolen from his previous employer... I'm pretty savvy and I was taken in."

But how far should you go in checking people out? The emergence of social networking sites means that [if users haven't adjusted their privacy settings] there is an awful lot of personal information available at the click of a mouse. Steve Girdler, marketing director with recruitment consultancy Kelly Services, says: "Sites such as Facebook and Bebo do provide employers with a channel for getting to know a candidate more before meeting them at interview." You have to be extremely careful how you use the information you find in this way. Teresa Dolan, an employment partner at law firm Hammonds, recently issued a press release warning: "A quick read of Facebook may reveal that a candidate is gay or has fairly outspoken religious or political beliefs. If the candidate is rejected on the basis of that information alone then the employer is at risk of a discrimination claim."

If you happen to catch a job applicant out in a CV lie—because of what you see on a social networking site or through some other source—what should you do? "Different clients react in different ways," says Kelly. "We have clients who will retract a job offer because a candidate said they got a B at GCSE when they actually got a C; others might be a bit more tolerant."

But she warns that overlooking deliberate dishonesty is a risky game for any employer to play—particularly in a sector such as financial services. Nick Leeson failed to disclose a County Court Judgement for unpaid debts in his application to be licensed as a derivatives trader—a fact his bosses ignored with catastrophic consequences.

In less extreme cases, the damage to a business can still be significant. "If you bring someone in whose integrity is in question, you risk damage to your reputation as they may not have the skills to do the job," says Kelly.
If it all goes wrong and you have to get rid of them, you will have replacement costs to meet and there could be problems with staff morale. "It's not good for other staff to see someone being marched from their desk in disgrace," adds Kelly.

If, despite your best efforts, you do end up taking someone on based on a fraudulent CV, you may have some recourse under civil law. If there has been material misrepresentation—in other words, the employee told lies that you relied on when making the job offer—you can serve a notice to rescind the contract and sue the employee for all the costs incurred in his or her employment, including recruitment costs and all salaries paid.

But Clayton warns that in many cases the dishonest employee will not have sufficient assets to make pursuing such a case worthwhile. And the burden of proof is on the employer: you must be able to prove that you were supplied with false information and that you relied on it when making the appointment.

So clearly, it's better not to be taken in by CV lies in the first place.

I. Former Conservative Party deputy chairman Jeffrey Archer is probably the most famous exponent of the embellished CV. He's said to have "inflated" a post-graduate diploma to an Oxford MA.

2. Alison Ryan was nicknamed "Alison Wonderland" by fans at Manchester United in 1999, after it emerged that the club's newly appointed director of communications had exaggerated her qualifications and forged a reference in the name of a non-existent lecturer from Manchester Metropolitan University. Ryan was found out before she started her £125,000 a year job.

3. In 2006, David Edmondson was dismissed from his job as chief executive of RadioShack, the third-largest electronics retailer in the US, when it emerged that his appointment 12 years before had been based on a falsified bachelor of sciences degree.

4. Patrick Imbardelli resigned from InterContinental Hotels last year when an internal review found his claim to three university degrees to be false. The highly successful chief executive of the firm's Asia Pacific business had been within days of joining the main board.

5. After Ann Wilson was sacked as managing director of BBC Technology in 2004 for "misuse of hospitality", it emerged she was a convicted fraudster. The widespread coverage of her story in the national press did not stop her from going on to be appointed a partner with headhunter Korn/Ferry or becoming a non-executive director with business information specialist Datamonitor—but she didn't keep either job for long.