HR's Most Haunted: True Stories from 2025

Think your hiring process is scary? Hold our pumpkin spice latte.

We asked HR leaders to share their most spine-chilling stories from 2025, and wow, did they deliver. From vanishing payrolls to AI gone rogue, these tales will have you triple-checking your systems and sleeping with one eye on your ATS.

Grab your flashlight and some candy corn. It's time for eight terrifying tales that'll make that candidate ghosting story seem like a sweet dream. 🧟‍♂️

8 spine-chilling stories from HR's dark side

1. The $412,000 disappearing act
2. The deepfake that got deep-fired
3. When AI plays favorites
4. The skill set switcheroo
5. The $35 million fraud artist
6. The ghost employee scheme
7. The AI that almost ate creativity
8. The portfolio poltergeist

1. The $412,000 disappearing act

When Guillermo Triana, Founder and CEO of PEO-Marketplace.com, saw 147 employee salaries vanish into thin air, he learned that sometimes the scariest systems are the ones working exactly as programmed.

"[Payroll] was completed overnight in a bulk ACH batch that ran cleanly and routed one incorrect digit to the same bank account across every record," explains Triana. "The bank caught it after four hours and froze the funds, but it still took just under 72 hours to reverse and reissue each transaction.”

Those 3 days were nothing short of a nightmare.

“Staff were freaking out, vendors were waiting and the phones were ringing off the hook," recalls Triana.

Let this be a cautionary tale that even the most trusted systems still need triple-checking. As Triana puts it, "The worst HR horror stories start with the best intentions and end with a spreadsheet."

2. The deepfake that got deep-fired

For Hailey Rodaer, Marketing Director at Engrave Ink, 2025's biggest scare came through a webcam. After hiring what seemed like the perfect remote marketing assistant, something strange happened during a team video call.

"The camera became frozen and the picture began to glitch into an entirely different individual. Our verification partner confirmed the identity had been stolen. The applicant had used AI tools to duplicate the credentials, work samples and profile of a real person."

The intrusion cost Engrave Ink $9,000 in lost work and two weeks of project delays. But the real cost was in team trust and security concerns. The company had to:

• Lock all internal accounts
• Alert law enforcement
• Conduct a complete security audit
• Rebuild confidence in remote hiring

With deepfake technology reaching frightening new heights, real-time identity checks are your light in the dark. Engrave Ink now requires live camera verification and photo ID checks before onboarding any new hire.

3. When AI plays favorites

At Phonexa, an AI onboarding assistant meant to simplify training turned into a discrimination nightmare.

"One of our new developers asked for a meeting with me. He looked anxious and told me the AI auto-flagged him as a high disengagement risk. The risk label was visible to his manager. The manager who didn't verify it adjusted his performance score based on it," recalls Human Resources Director Anush Gasparian.

Unfortunately, the damage was done. 💀

"The developer had discussed this with others and a new rumor started going around. That our AI doesn't like introverts. Unknown to us, it equated silence with disinterest and penalized neurodivergent and non-Western communication styles."

Employees started editing their messages to sound more positive. They were more focused on beating the AI than actual communication. What started as an efficiency tool transformed into an anxiety-inducing, focus-stealing monster.

Gasparian and the team at Phonexa fought back:

• Paused the AI model
• Held emergency meetings
• Communicated transparently about the issue
• Readjusted affected performance scores

A week after the discovery, the developer thanked the HR team for taking action. His manager apologized and corrected his score. And everyone learned a critical lesson: No matter how scarily good they get, without human oversight AI tools are as worthless as a brain-eating zombie.

"Despite all technological advancements," says Gasparian, "our job as HR remains human stewardship."

4. The skill set switcheroo

For David Magnani, Managing Partner at M&A Executive Search, this year's HR horror story came wrapped in an impressive resume. A candidate claimed extensive experience with AI and provided glowing recommendations.

But in the wild world of hiring, if it seems too good to be true, it probably is.

"A candidate had told us that she had experience in handling multiple AI recruitment tools. She was the ideal candidate for a client of ours. Her excellent recommendation also helped in getting the role," Magnani explains.

Great credentials. Perfect recommendations. What could possibly go wrong?

"After hiring her, our client informed us that she had lied," Magnani recalls. "The new hire had no experience with advanced AI tools." And those stellar references? Turns out, they were fellow partners in crime.

"After further investigation, we discovered her references were also not real. They were, in fact, friends and family members of hers who also lied."

This double nightmare of false credentials and fake references led M&A Executive Search to implement pre-interview skill tests for all candidates.

5. The $35 million fraud artist

For Austin Rulfs, Founder of Zanda Wealth, a star performer's mask finally slipped after six months of record-breaking sales.

"He turned up with an exemplary resume, was a complete package and within the first six months, he smashed all the sales records. I had been making real plans for him to get up in the world," recalls Rulfs. Then came a single call from a bank's fraud department.

"It had turned out that he was an expert in his falsification of financials, fabrication of paystubs and fabrication of full fabricated work histories on behalf of customers."

The betrayal cut deep. 🔪

"Frankly, the consequences proved to be such a nightmare. We were now confronted with a gap in our loan book amounting to $35 million," Rulfs shares. "On my part, I found the worst thing in being a secret auditor of 42 of his files, him being seated right down the hall, and being unaware that we were aware of it. I believe that betrayal is what bothers me. It was I who brought him in and his deceit almost sunk the whole company that had taken ten years to establish."

Trust but verify. Especially when the numbers seem too good to be true.

6. The ghost employee scheme

Even HR professionals can turn to the dark side. Marcus Denning, Senior Lawyer at MK Law, shares the tale of a veteran HR head who spent 18 months paying nonexistent employees. 👻

"A ten year veteran head of HR in our company introduced ghost employees in our payroll. She spent 18 months paying these fake persons and she paid in excess of 150,000 to her own accounts," Denning shares.

"The figures were discovered by an external audit, but the betrayal was the most striking to me. The same individual who was supposed to create a sense of integrity in our company was actually draining it."

The aftermath involved forensic accountants, police reports, and a complete overhaul of financial controls. "It was a very difficult lesson that I learned that day," Denning reflects. "You shouldn't rely on trust as a control of business."

As Denning now advises all clients: “You must create defense against the one who you would least suspect."

7. The AI that almost ate creativity

Sometimes the scariest moments come from what almost happened. Jun Zhu, Founder of Vidu AI, caught a potentially disastrous AI hiring tool malfunction just in time.

"My worst HR nightmare was when our AI hiring tool filtered out the best candidates because the keyword weight was set up wrong. It literally turned down creativity in favor of compliance," explains Zhu.

While they caught the issue before it could do serious damage, it highlighted a crucial truth about AI in hiring:

"The glitch wasn't the scariest thing; it was realizing how easily bias can hide in code."

By 2028, 1 in 4 job candidates will be fake. But just because you have to fight AI with AI, doesn’t mean you can blindly trust your candidate screening tools to make the right call.

Always audit your AI tools, or risk letting great talent go straight to your competitors.

8. The portfolio poltergeist

At Colour Vistas, Hasan Hanif thought he'd found the perfect marketing assistant. The resume was polished, the portfolio impressive, and the references seemed solid. But something wasn't quite right.

"The candidate had a polished resume stating that he had two years of experience in the management of campaigns of a design firm in Toronto named PixelForge. The portfolio contained the screenshots of the campaigns and engagement metrics and even the ad manager dashboards showing the company logo," recalls Hanif.

There was just one red flag: the reference email used a Gmail domain.

"After contacting PixelForge via the official contact form, the HR representative of the company stated that the individual did not and still does not work at the company and that the dashboards used in the portfolio were screenshots of their active campaigns on LinkedIn."

The candidate had ghosted. But not before nearly haunting Colour Vistas with stolen work samples and fake credentials.

"Since then, we have introduced domain-based reference checking, metadata cross-checking of work samples submitted and a final interview with a 15-minute live task, which is screen sharing and live execution," says Hanif.

Sure, it takes an extra two days in hiring time. But for Hanif and the Colour Vistas team, it’s worth it. These new steps have "minimized fraudulent candidates by 90% in three months."

Protect yourself from HR nightmares

These tales of terror might keep you up at night, but they also offer valuable lessons for protecting your business. Here's your survival guide.

Identity verification

In a world of deepfakes and digital disguises:

• Require live video verification for remote candidates
• Check photo IDs against live camera feeds
• Cross-reference professional credentials
• Verify company domains for references

AI oversight

Because sometimes the scariest monster is the one you built:

• Keep humans in charge of critical decisions
• Test AI tools regularly for hidden biases
• Monitor pattern detection accuracy
• Document and review automated decisions

Trust but verify

Remember, the best horror stories are the ones that never happen:

• Run skills assessments before making offers
• Implement multi-person approval for sensitive actions
• Audit financial controls regularly
• Document everything

Plot twist: Your hiring process doesn't have to be scary 🎃

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Now that's what we call a happy ending. 🧛‍♂️