Fraud in the UK reached a record high in 2011. The KPMG Fraud
Barometer revealed that fraud totalled £3.5 billion in 2011, an
increase of 150 per cent on the previous year, but the majority of
that was in the second half of the year http://bit.ly/xmv8Yi
Scams committed by those in management positions increased by 74
per cent, accounting for 57 cases and a value of £729 million. The
most fraud was carried out in the public sector and at financial
firms.
When it comes to trade, SMEs as well as large corporates are
equally vulnerable. Graydon UK has identified a number of steps
that businesses can take to protect themselves against the threat
of corporate fraud:
•
Always obtain a credit report for customers and suppliers that does
not simply regurgitate Companies House data but one that tracks and
analyses unusual patterns of corporate behaviour in order to
identify potential fraud
•
Never set up a client account until their application has been
fully processed
•
Always check clients' trading and registered office addresses
• Be
wary of mobile phone numbers and non business e-mail addresses such
as hotmail or yahoo
•
Check whether your customers have a website when establishing their
identity
•
Most companies will pay their bills by completing a purchase order
from their accounts department - make sure that you obtain a copy
of this before sending an invoice
•
When dealing with non incorporated businesses, always request
original copies of utility bills quoting the delivery address
•
Double check all delivery addresses, keeping a close eye on what
sounds like residential addresses
•
Check whether clients are VAT registered by calling the VAT Office
for confirmation
It is also extremely important to flag certain events and
details that seem out of the ordinary. Here are some examples of
incidents which should alert firms to the possibility of fraudulent
activity taking place:
• Is
a sudden change of delivery address provided to you by the
client?
• Is
there a last minute call to collect the goods rather than have them
despatched to the quoted delivery address?
• Is
the delivery address given by the client shown on the credit report
you obtained from your agency?
•
Are the telephone numbers of the business you are dealing with
fixed line or non geographic such as 0800 numbers?
•
Have you received an order on the last afternoon of the month?
Fraudsters, like credit managers, understand the pressure from the
Sales Department!
•
Look out for unusually large orders placed at the start of a new
month, where a fraudster will anticipate that they have the longest
timeframe before you chase for payment.
•
Have you received a large first time order on a credit card? If so,
be wary.
