Sponsored

Fraud needn?t be festive

No one wants to explain to their shareholders in next year’s company report that profits have been wiped out by fraud and there is no reason that they should be this Christmas. The festive season promises to be a fillip for companies across the UK after a tough trading period and taking some simple steps will ensure that fraud will be a footnote in the annual report, not on the front page.

As transactions increase over Christmas, SMEs need to be aware of the increased fraud threat at an already busy time of year. Historically a great deal of fraudulent activity is reported in the first quarter of the year due to companies remaining blind to it during what is often one of their most hectic trading periods of the year.

To counter this, the Fraud Advisory Panel has advised SMEs to consider three simple elements when fighting fraud: prevention, detection and investigation.

Prevention

Prevention is always better than cure. A culture should be created within the company that fosters the correct attitudes towards security and vigilance.

Detection

Unfortunately, fraudsters are always thinking of new ways to succeed so prevention is not always possible. However, the earlier a fraud is detected, the better, and staff can be trained in procedures to spot suspicious transactions, for example.

Investigation

A company should have a fraud response plan to ensure that they can deal with any fraudulent activity swiftly.

In case any SME needs convincing of the dangers of fraud, a recent Home Office report revealed that there are particular risks for those companies with a turnover greater than £20 million and an 11% greater risk to those SMEs that trade online. Often fraud can go unnoticed or unreported, and to illustrate this, the government recently increased its estimate of the amount lost to fraud in the UK from £38.4bn to £73bn, mainly as a result of previously unknown fraud within the private sector.

SMEs are estimated to suffer a £26.7bn share of this but by following some simple steps and remaining vigilant this Christmas, this number can start to come down.

Any company that does think it may have been the victim of fraud is urged to call 0300 123 2040 or visit www.actionfraud.police.uk.