UK money
Jamie Hardesty

North East firms lost £1.7m in mandate fraud last year, data shows

Businesses in the North East are being urged to alert staff to the dangers of mandate fraud, after new figures show that companies in the region lost £1.7m last year.

Obtained by RSM from Action Fraud, the UK’s national fraud and cyber-crime reporting centre, the data revealed that businesses in the region submitted 43 reports about mandate fraud in 2016-17.

Mandate fraud occurs when an employee is tricked into changing a regular payment mandate such as a direct debit, standing order or bank transfer and redirecting it into a fraudster’s account.

The fraudsters can contact employees via email purporting to be from a supplier that receives regular payments.

Such approaches are sometimes plausible as they have correct details of staff members’ names and departments obtained as a result of phishing attacks. The scam will often only come to light when the real supplier chases for payment.

Nationally, there were more than 1,500 reports about mandate fraud in 2016-17 costing businesses some £32.2m, 12 per cent of all losses reported to Action Fraud by UK businesses last year.

Akhlaq Ahmed, forensic partner at audit, tax and consulting firm RSM said: “These figures show that far too many businesses across the region are falling victim to mandate fraud.

“While in some cases the losses are relatively small, in others they can run into hundreds of thousands of pounds, potentially putting the future viability of the business at risk.

“Businesses must wake up to the threat of mandate fraud and take urgent action to prevent it. With the right training and controls in place, there’s no reason why these fraud attempts should be successful.”

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