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Businesses losing out to fraud
Published on the 29th January 2020

The cost of business losses from fraud and scams reached £682m in 2018/19, according to figures from Action Fraud, with nearly 60,000 reported cases.

While larger businesses are more likely to be able to absorb the impact, smaller businesses are at far greater risk of serious financial implications.

Three types of fraud stand out from the Action Fraud figures:
Employee Fraud £213.7M
Mandate Fraud £99.3M
Plastic cards and online bankc accounts £98.1M

Employee fraud

Reported losses from employee fraud are on the rise. Examples include the misuse of corporate cards, claiming personal items as business expenses and claiming unworked overtime.

You can help to reduce your vulnerability to such abuses by fostering a loyal environment, so whistle-blowers feel they are able to come forward in confidence without any fear of reprisals. Staff may have suspicions or evidence about a colleague's fraudulent behaviour, but feel hesitant in raising concerns.

Payment frauds

Mandate fraud occurs when an employee is deceived into redirecting a regular payment mandate (such as a direct debit, standing order or bank transfer) to a fraudster's bank account. The regular payments means that losses are likely to be higher than for one-off invoice fraud. Verify requests for amended payments with the organisation or supplier in question directly using established contact details.

There is considerable scope for fraud where debit/credit cards are lost or stolen, if card details are cloned or if online banking details are compromised. Even the fast vanishing cheque can still be used in a scam – where a business receives a cheque for too much money and is asked to return the balance electronically.

More sophisticated schemes can involve fraudulent payroll companies, co-employment of a workforce and the use of umbrella companies.

If you need help securing your business from fraud, we can assist you.

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