- Be rigorous in recruitment and check references in CVs.
- Have a ‘whistleblower’ policy for employees who may have suspicions about colleagues.
- Be sure your employees are aware of your terms and conditions of their employment in relation to theft and fraud and enforce them.
- Take a hard line on culprits by prosecuting criminal offences.
- Always check bank and trade references of suppliers and clients.
- Have effective contingency plans in place in the event that a serious compromise has taken place.
- Regularly review procedures for handling financial data and cash.
- Ensure computer security is tight and take a regular backups of data.
If you suspect your employer is not deducting Income Tax and National Insurance contributions, use the Business Anti-Fraud Helpline on 0800 788 887. The number is staffed Monday to Friday 8am to 8pm and weekends from 8am to 4pm.
Long and Short Firm Fraud
- Long Firm Fraud is normally where an apparently legitimate business is set up with the purpose to defraud after a relatively long period of time.
- This has usually involved the creation of a relationship where a fraudster initially pays for orders having supplied false details such as credit references and filed accounts to obtain credit. They then hit the victim companies for larger orders, which they fail to pay for.
- Short Firm Fraud involves fraudsters using an off-the-shelf or dormant company, and file entirely fictitious accounts at Companies House. They then apply for goods on credit across numerous suppliers and fail to pay for goods subsequently received.
Ways to avoid such fraud include:
- Do not merely rely on healthy accounts filed at Companies House.
- Require trade references and check them.
- Check company numbers for Companies House and VAT.
- Obtain a banking reference.
- Use a recognised credit reference agency.
- Visit potential new customers.
- Obtain landline and mobile phone numbers and confirm them.
- Check why existing customers are asking for delivery to new addresses.
- Be aware of existing customers changing their behaviour.
- Consider use of Companies House anti-fraud services.
- Ensure your business has defined credit control procedures.