Commercial cyber crime represents a huge challenge in the uk, while it’s only likely to get worse in the months ahead.
In total, business cyber crime increased by a staggering 63% during 2017, with a worrying 4.7 million instances of fraud and computer misuse reported in the year ending September 2017.
This includes something referred to commonly as mandate fraud, which is a growing problem among employees throughout the UK. In this post, we’ll explain mandate fraud in greater detail while asking how you can avoid it.
What is Mandate Fraud?
In simple terms, mandate fraud occurs when an individual is tricked into changing a regular payment, Direct Debit or standing order.
Fraudsters will communicate with employees while pretending to be a key client or a regular supplier, often by using cloned email addresses. They then inform the recipient that they have changed banks and need to amend the associated payment details, encouraging them to change their standing order in the process.
The money is then taken fraudulently, and the scam usually only comes to light when the real supplier chases their money. Depending on the precise payment or invoice terms, this time may not come until months after the crime has been committed.
How Damaging is Mandate Fraud and how do you Spot it?
According to data obtained by RSM on behalf of Action Fraud, the rate of mandate fraud in the UK more than doubled during 2017.
In fact, the total amount lost through mandate fraud peaked at £77 million at the end of last year, with a staggering 3,451 reports filed during this period. The number of individual instances also increased by 123% year-on-year, dwarfing the previous years’ figures of 1,551.
During the financial year 2017/18, the average amount lost by each business was fixed at £22,500, with this figure 8% higher than the previous year.
Given the number of businesses that are falling victim to mandate fraud, there’s no doubt that companies must take actionable steps to protect both their finances and their employees.
This requires detailed training, as they ensure that their accounts staff are trained to recognise the hallmarks of mandate fraud attempts. This may include everything from unfamiliar languages to questionable email addresses, and there’s no doubt that a vigilant eye can help to counter mandate fraud at source.
It’s also important for business-owners to implement strict controls and protocols, specifically by ensuring that all bank account changes are confirmed with management and the individual client over the telephone.