The big business in business fraud

Credit Show poll reveals 50% of UK firms hit by fraud and a third say they can't even spot the crime.

50% of UK firms hit by fraud; a third say they can't even spot the crime; 1 in 20 lose over GBP1 million a year to fraud.

More than half of UK businesses have lost money because of fraud, yet nearly a third of firms admit they have no mechanisms in place to spot when they are being swindled.

In fact one in twenty companies say they have lost over GBP1 million a year due to fraud.

These shocking findings, revealed in a poll of credit professionals carried out by the Credit Show, found that more than two out of five companies say they have been defrauded by customers, whilst over a quarter of those have suffered fraud at the hands of their own employees.

In addition 17% of firms say they have been affected by fraud from a third party, while 9% have been defrauded by their suppliers.

Although 46% of the companies polled were confident they have not been hit by fraud, 29% of respondents admitted they do not have anything in place to spot potential fraud, whilst 20% wait for their annual audits to reveal any problems.

In fact more than a third say they would not know how to spot the signs of fraud.

It could be that firms are therefore understating their losses, because 57% of companies say they have only lost less than GBP1,000 a year due to fraud.

However, 23% of businesses admit to losing between GBP1,000 and GBP100,000 a year, whilst a significant 6% of companies say they have been scammed for more than GBP1 million.

Kelly Stanley, spokesperson for the Credit Show, says: "It seems that the majority of UK companies suffer from at least some low-level fraud, but the most worrying thing is the large number of businesses with little or no measures in place to spot fraud.

"Indeed, 6% of the companies surveyed admit they have 'turned a blind eye' to fraud in the past, with half of those believing that the crime was either too small, or would be too expensive, to prosecute.

The worry is that they will have missed many more scams or fiddles, which in total could be a major financial loss." The Credit Show says that many businesses are not proactive in looking for fraud and subsequently only spot scams and fiddles when there is a discrepancy in the accounts.

By then it could be too late to recover the cash.

As many fraudsters are so good at covering their tracks, for many firms the crime may never be spotted.

So The Credit Show has put together some high-level tips to help firms begin to develop an anti-fraud strategy.

They include:.

* Identify the vulnerable parts of your business, whether it is stock or your finances, and develop a strategy to protect them.

* Carry out regular and random audits to insure the books balance or that stock has not gone missing.

* Always double check credentials of customers, suppliers and third parties with credit checking agency before extending them credit.

* Implement good security procedures, both in terms of physical protection, but also administrative measures.

For example, make sure your IT systems are password protected and restrict physical access by non-employees to sensitive or valuable areas of your premises.

* Contact your accountant or a specialist to find out more about spotting fraud.

* Visit the Metropolitan Police Fraud Alert Website for news, information and advice for tackling business fraud.

The Credit Show is a must-attend event for anyone involved in the credit industry.

Visitors will have access to more than 60 major-name exhibitors; new products and solutions; free advice from the experts; innovative ideas and inspiration as well as unrivalled networking opportunities.

The show's interactive conference will offer exciting opportunities to learn from high profile industry experts.

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