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Protecting your business from fraud attacks – Marketwatch

by: Mortgage Solutions
  • 02/09/2015
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Protecting your business from fraud attacks – Marketwatch
Fraud specialists Action Fraud and CIFAS recently issued alarming statistics which highlighted that 749 business had reported instances of fake invoice scams between January and June this year compared to 603 in the whole of 2014.

Small and Medium Sized Enterprises (SMEs) were warned to be extra vigilant during times when senior managers were on holiday because junior or temporary staff may be less experienced at spotting instances of fraud. Small firms are unlikely to have dedicated fraud prevention teams but being armed and ready for the threat of fraud should be a priority because any loss of earnings could damage the future of the business.

David Foley, fraud risk services director for Baker Tilly, explains how firms can build a fraud detection and prevention strategy.

Adam Rowse, head of business banking at Barclays, describes the different scams which businesses may face and gives top tips on how to firms can prevent themselves from falling foul to fraud.

Ade Potts, managing director of Experian’s SME business, talks about how fraud protection needs to go beyond initial customer checks.


David FoleyDavid Foley is fraud risk services director for Baker Tilly

Fraud can have a profound effect on business and fraudsters target all manner of companies regardless of size, sector or location. So business owners that adopt the ‘it won’t happen to me’ approach, could be exposing their business to some serious risk.

Fraud can be committed internally by employees or management or externally by suppliers, customers or third parties. The most difficult type of fraud to detect, and the one which is probably your worst enemy, is where internal and external fraudsters collude. Internal staff and suppliers may work together to defraud a company.

The impact of fraud can be wide ranging. As well as having a serious financial and reputational impact it can also cause emotional distress to employees. So what can be done? Remember to treat fraud as a controllable business cost. Start with the basics and understand where your fraud risks are then introduce preventative measures.

It’s important that senior managers set the tone from the top – this must happen if you want to build a healthy anti-fraud culture. Raising awareness of fraud among staff helps to empower them. This way they’re more likely to detect it first. A response plan needs to be put in place so that when fraud is detected you can take control and prioritise what must be tackled immediately and what can wait.

Remember, don’t just know your staff but know your customers too. Conduct appropriate due diligence and employment screening processes.


Adam RowseAdam Rowse is head of business banking at Barclays

Keeping your business and hard-earned money protected from any fraudulent threats is important. Businesses that take proactive steps to boost their resilience can prevent losses in many cases and minimise the impact of fraud where it does occur.

‘Phishing’ is where fraudsters send you emails with links to bogus sites or they may ask you to fill in an online form to capture your security information. ‘Vishing’ is similar but involves a phone call from a fraudster who will come up with a plausible story to try to get you to divulge your information. Phone calls, letters, emails and texts from scammers can seem legitimate and convincing so it’s important to be vigilant and keep an eye out for anything suspicious.

Here are some steps you can take to remain protected including:

• Keep contact details current: ensure your bank has up-to-date mobile/telephone contact numbers for your business so they can speak to you if they spot unusual or suspicious activity on your account.
• Get up-to-date security software: make sure your computer systems and any web-enabled phones are protected with the latest internet security software.
• Treat all unsolicited emails with caution: don’t click on links or open attachments in emails you weren’t expecting or are not sure about.
• Use strong passwords: passwords should have a mix of letters, numbers and symbols –avoid obvious things like your name, birthday or phone number that others can guess.
• Protect yourself from invoice fraud – have at least two people authorised to perform signatories for financial payments to help verification.
• Verify any new supplier payment details you may be sent, if suspicious speak to the supplier directly to confirm they have changed their details, before making a new payment.
• Be aware when using public Wifi and check it has Wifi Protected Access (WPA) or WPA 2 – if a network doesn’t require this it’s probably not secure.


Ade PottsAde Potts is managing director of Experian’s SME business

Company fraud can conjure up images of corporate espionage, high profile scams and fraudulent activity in large enterprises. But fraudsters can see small businesses as an opportunity to extract more money than they could from an individual.

Nearly 286,000 SMEs have been affected by fraud during their time in business, according to our research, costing them a total of almost £8bn. So, how do mortgage brokers and other small companies avoid adding to this statistic?

First of all, you want to be sure your new customer exists. Carry out appropriate checks to ensure the business is real and test the phone number they provide. It’s wise to visit the customer in person for significant sums, while online street view maps offer an alternative. This research will help you decide how much credit they can be afforded, or whether it’s best to ask for payment up front.

It’s important to continue credit checks beyond the initial sign-up – situations change and a once reliable customer can run into financial difficulty. Insolvency fraud occurs when a customer who has gone bankrupt continues to trade illegally. The same directors may even set up a phoenix company which isn’t liable for the original company’s losses, so you won’t receive payment for outstanding invoices. By monitoring customers with Experian Business Express, you’ll be alerted when they hit financial troubles and can act accordingly.

Keeping an eye on your own credit report can also help to foil fraudsters. Using a tool which gives you real-time alerts when your credit file is searched or there is a significant change to your report can act as an early-warning system that you’re being targeted.



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