The latest figures from the Financial Ombudsman Service (FOS), show that scams in the UK are on the rise.
The FOS received almost 22,000 complaints related to scams and fraud in the 2022/23 tax year. This figure marked an approximate 20% rise from the previous year.
Almost half (10,985) of all scams reported were authorised push payment (APP) scams. These usually fall into two categories:
- “Malicious payee” scams, which trick victims into buying goods that don’t exist or that they have no intention of sending.
- “Malicious redirection” impersonation scams where scammers pretend to be from an organisation like your bank, the government, the NHS, or police and ask for funds directly.
There has also been a rise in “hybrid” scams – those that incorporate more than one scam type.
As a business owner, you’ll want to keep your employees and your business safe. That means being aware of the latest tactics scammers use, and more importantly, educating your staff to stay alert for potential scam red flags.
Here are a three of the main scams affecting businesses and the warning signs to look out for.
1. Hybrid scams
Criminals are constantly evolving their tactics. One of their latest ploys is to combine different scam types in a bid to make them harder to spot.
Educating your staff on the types of fraud out there is a crucial first step in preventing your staff and business falling victim.
Recent hybrid scams have combined:
- Romance scams, which see fraudsters cultivate a relationship with their victim online that leads to requests for money or a transfer of funds, often to non-existent cryptocurrency investments.
- Non-existent sale item scams, which are exactly what they sound like. Victims part with money for goods bought online but the goods don’t exist and the scammers simply pocket your hard-earned cash.
- “Safe account” scams, which are a type of APP scam that increasingly see fraudsters purporting to be cryptocurrency experts, looking to move your money to keep it safe.
Making your staff aware of these types of scams, and the possible combinations of each, should help you to keep them and their money secure.
And, of course, staff whose money is safe – and who feel confident about identifying potential threats early – will also be able to identify the same threats to your business.
2. Invoice scams
The UK Finance Annual Fraud Report found that UK businesses lost £77 million to APP scams in 2022.
If you run a small or medium-sized enterprise (SME) you’ll need to be aware of invoice and mandate scams.
Fraudsters who gain access to your records can pose as a trusted third party – your bank, energy provider, or a regular supplier, for example – and supply an invoice or mandate for work done or services supplied.
Because the firm chosen will be one you and your staff see and use regularly, it might not raise immediate red flags. Scammers might also clone existing websites and invoice formats. It can be all too easy for harried staff to process these payments without thoroughly checking the details, which the scammers will have switched for their own.
Adequate staff levels and training will help. As well as thorough checking and authorisation processes. These also help to make your staff feel safe and confident that they aren’t the only barrier against potentially harmful fraud.
3. CEO scams
Well-trained and confident staff can also help to prevent CEO scams.
Embedded checking and authorisation processes should be followed regardless of who is asking for payments to be made, and however high up they are in your business.
Criminals looking to capitalise on SMEs’ poor practices will often look to target new and inexperienced staff or companies with poor processes in place.
By purporting to be the company CEO, cloning your email address, or searching for an umbrella company boss online, scammers seek to pressurise newer members of staff into relaxing existing processes, making poor choices, and pushing payments through quickly.
Requests could come via telephone or cloned email accounts so check bank details and email addresses. Having thorough processes in place, which are followed no matter where a request appears to be coming from, is key.
Get in touch
If you would like help keeping your business safe from scams, there are plenty of organisations that can help. Once your staff are educated and your business is protected, we can help you to make the most of your business’s finances so speak to us now. Get in touch by emailing hello@fingerprintfp.co.uk or calling 03452 100 100.
