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When news stories about the latest HMRC scammers break out, it’s all too easy to think it’s the sort of thing that happens to other people. In fact, businesses all around the world get financially scammed every single day, with smaller business more likely to be targeted.

Why are small businesses more at risk from scammers?

Micro, small, and medium-sized enterprises often don’t have resources readily available to fortify the business.

Their physical size in terms of staffing power is part of the problem; fewer people means that secondary checks are less feasible. Any process with a reduced amount of ‘contact’ points provides less opportunity where problems might be spotted, pondered upon, discussed or dealt with,

Small business operations typically have smaller cash reserves, so simply can’t afford the more sophisticated end of the security market.

Plus, smaller businesses pose much less threat to scammers. Sadly, their lack of resource indicates less likelihood of the business being in a position to cause a fuss.

The financial cost of scams to UK business

Unfortunately the multiple ways that fraudsters can target a business mean that any defence must consider multiple entry points.

Payment cards can make online purchases, only for the payment to be queried by the genuine cardholder once the goods are sent out to the scammer. Cyber-crime during the payment handling process can target unprotected ecommerce sites, whilst phishing campaigns can decimate a business.

Research from UK Finance revealed that this sort of crime cost smaller British businesses around £93 million in 2018. That’s an abominable amount of cash going to waste, which could be better directed into growing the businesses, boosting the economy in the process.

The red flags of business fraud

Spotting the warning signs of business fraud is increasingly difficult, as thieves become ever more sophisticated. Red flags might include sudden changes of address, unsolicited opportunities, or even changes in staff circumstances. According to government resource Action Fraud, 1 in 5 small businesses are defrauded by an employee.

What can small businesses do to protect themselves from fraud?

Performing a spot of due diligence on potential new suppliers might seem onerous, but could help you spot areas of risk. Many suppliers ask new customers to pay all, or most of the bill upfront in order to protect themselves from non-payment. It’s not beyond the realm of reason that a scammer might capitalise on this behaviour to take payment, without ever having anything to supply.

In any situation, if you feel something isn’t right, try not to ignore it. Whether you operate on gut instinct or tangible fact, anything which signifies a problem should be resolved to your satisfaction.

Backing up data can protect your business

Storing data securely, whether physical or digital, is essential. Not only are there legal requirements for this, but doing so can protect your business.

Lost data can damage your client relationships if they feel their information is unsafe, having serious consequences for your brand’s identity.

Consider too, how the loss of ‘need to know’ business details could impact your business operations. Formulas or recipes which are intrinsic to the quality of your product, for example, could fall into the hands of your competitors if lost.

Storing your data also prevents it being used against you. Someone who calls with a lot of insider knowledge about business operations, or various HMRC reference numbers, is likely to be more believable than a less prepared opportunist. Locking your business data away will give scammers fewer chances to use it to your detriment.

Bring in the professionals for business fraud protection

As tempting as it might be to shriek Ghostbusters when asked who you’re gonna call, they’re unlikely to be the best bet.

Instead, calling in the relevant experts for a cyber security, or qualified accountants to keep an eye on financial issues is likely to see you in good stead!

About The Author

Stephanie Whalley

Serial snacker, compulsive cocktail sipper and full time wordsmith with a penchant for alliteration, all things marketing and pineapple on pizza.

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