SMEs warned to be on the lookout for fraudulent activity
Small businesses in the UK have been warned to be on the lookout for invoice fraud, after a huge increase in this type of activity being reported to authorities.
Action Fraud has said it has received 749 reports of businesses falling victim to this type of scam in the first six months of 2015.
That compares with 603 cases in the entirety of 2014 and 739 in 2013, although the figures may be even higher if other victims have failed to report the fraud.
As a result of the increase in scams, Action Fraud has warned employees to keep a watchful eye out.
In most instances, fake invoice scams involve a fraudster posing as a supplier before attempting to change the account details that are on record.
A staff member may then innocently amend the details, leading their company to pay fraudsters rather than their suppliers.
This would likely occur until the issue was identified by the supplier chasing for payment or when details are checked.
Depending on how long the fraud has occurred for, it could place a business under incredible financial strain as the suppliers would still require payment.
In terms of outgoings it means the victims of fraud could end up paying twice for goods and services, and could be left needing business rescue if the scams are widespread, or have remain undetected for a long period of time.
Businesses that do fall victim to scams are encouraged to report it as soon as it is spotted while efforts should be made to ensure staff can spot any attempted fraud.
This includes training up temporary or less experienced staff during the summer months when others are away so that they can recognise the signs of an attempted scam.
While businesses of any size face a potential risk of fraud, smaller businesses can struggle to recover should they fall victim to a scam, making it essential that they take actions to limit their vulnerability.
By Phil Smith