Protect yourself, your business and your loved ones from fraud
Posted on 25th August 2023 at 09:26
As anti money laundering regulations (AML) are stepped up across the board, do you know what to do to protect yourself, your business and your loved ones? No? Ok….
So let's talk Fraud. After digging a little deeper, we found over 160 different types of fraud categories but does that tell us how to best protect ourselves? What does this really look like…
"Fraud is when trickery is used to gain a dishonest advantage, which is often financial, over another person."
There are many words used to describe fraud: Scam, con, swindle, extortion, sham, double-cross, hoax, cheat, ploy, hoodwink, confidence trick and government statistics show that about 50% of all crime is due to fraud.
We have seen scams that come in the form of HMRC texts owing you a refund, whatsapp’s pretending to be your children, emails asking for money or you have a long lost relative that has left you money the list is endless. Lately we have seem more romance scams but they just don’t seem to stop no matter how vigilant we are.
So the question remains on how do we protect ourselves and each other? Here are some things you need to know and do.
Report suspected fraud to Action Fraud in the first instance.
There is an online tool and a webchat available 24 hours a day.
You can also report it by calling 0300 123 2040 Monday to Friday between 8am – 8pm.
You will be provided with a reference which is the equivalent to a crime reference number. From here you can monitor and track the progress of your report.
The main reason to report this is because, sadly, you area not the only one it's happened to. This could be occurring all over the country s part of a much wider ring of deception, so your piece of information could be valuable to solving and stopping wider crime.
Fraud doesn’t just stop with vulnerable or the less vigilant, it affects businesses from the inside out. There are many news stories such as the Enron scandal and corporate fraud with the falsification of records. So let’s talk corporate fraud….
Corporate fraud is referred to as “when companies engage in activities that are dishonest or illegal”.
The impact of business fraud can be dramatic, particularly for small or medium-sized businesses, where losses can financially cripple or even ruin them.
Do you know what types of fraud can threaten your business? Well, fraud can come from staff members, customers, suppliers and through third parties, unconnected to the business, so pretty much everywhere. Criminals will and do use a variety of tools and techniques and they are everywhere.
Just because the business you are trading with is a registered on Companies House, does not mean it's legit.
Just because your business has an annual audit, does not mean there isn’t fraud going on somewhere.
You might be running your business legitimately, but your staff could be behaving fraudulently and you will still be held accountable.
It really can happen to you and the most popular type of fraud currently is payment or banking fraud. These statistics are shocking:
Payment or banking fraud - 69%
Accounting Fraud - 26%
Procurement fraud - 21%
Monetary losses are not the only thing going on here. This could be damaging to a business’s reputation or could damage their brand. The ongoing impact of this fraud could result in much greater losses to the business. So what is your fraud strategy?
We found The Little Book of Business Scams from the Met Police to be such a valuable read on how this happens and what practical steps we can take to protect ourselves against financial crime. It might seem like a long read but it's worth it to safeguard your business.
We have condensed the Met’s 10 tips to prevent business fraud:
Be sceptical - If it sounds too good to be true, it probably is.
Know your business inside out - Have a thorough understanding of your business.
Know your customers and suppliers - When you understand who you do business with you can spot any business anomaly.
Identify areas where your business is vulnerable to fraud - Imagine how a fraudster might target your business, both internally and externally.
Develop a strategy and talk about fraud - Think about the right fraud prevention and detection strategy for your business.
Take extra care against cyber attacks - With increasing threats from cybercrime, protect your business technology against attacks.
Understand your finances - Understand how money leaves your business.
Secure and protect your property - This includes laptops, computers, smartphones and intellectual property
Develop an action plan - Consider when you might need professional or legal advice. While prevention is better than cure, it’s important for you and your business to be prepared for the worst.
Always report fraud and get help - Report to Action fraud.
HMRC also have a wealth of advice with regards to protecting your company from fraud and scams.
I guess the only question left if how do we as an accountant help you. We have our own policies, procedures and standards to adhere to when it comes to anti money laundering.
When bookkeeping or preparing accounts we go to source documents and ask questions of our clients when things don’t seem right. We have strict guidance on engaging with new clients and the documents required to pass though that process seamlessly. Understanding our clients and their businesses is taken very seriously and maintaining an honest relationship ongoing is vital.
We take this very seriously and hope this information has been of value to you and your business. Stay safe out there and take care of each other.
Tagged as: Advice For Business Owners
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