It’s not just your personal finances that may be attractive to fraudsters. As a business owner, you might also want to consider the steps you could take to halt a potential scam that targets your firm. Indeed, research suggests it’s something overlooked by many small business owners.
According to UK Finance’s Annual Fraud Report 2024, almost £1.2 billion was lost to personal and business scams across more than 2.9 million cases in 2023.
The most common type of scams to affect businesses in 2023 were invoice and mandate scams. This is where a scammer may intervene when you’re trying to pay a legitimate invoice to redirect the money to their account. They may pose as legitimate suppliers and claim their bank account details have changed.
Non-personal losses through invoice and mandate scams totalled £35 million in 2023.
Fraudsters might also use a CEO scam to target businesses. In this deception, the scammer would pose as the CEO of the business or another high-ranking team member to convince a member of your staff to make an urgent payment to their account. In some cases, the criminal may even use spoofing technology so it appears messages have come from a genuine email address or phone number.
In 2023, more than 380 businesses fell victim to a CEO scam.
Scams you might more commonly associate with individuals could affect your business too. For instance, in 2023, there were more than 3,600 non-personal purchase scams reported. Businesses were also affected by investment scams, police impersonation, push payments, and even romance scams.
Almost 7 in 10 small businesses use weak passwords to access critical documents
Fraud could leave businesses in a financially vulnerable position. Yet, a survey suggests that many small businesses aren’t taking simple steps to mitigate the risks.
According to a survey reported by HR Review, almost 7 in 10 small businesses could be exposed to fraud because they’re using weak passwords to access critical documents and internal platforms, which could leave them open to cyber threats. In addition, nearly half (47%) did not have up-to-date antivirus software that would detect a hack.
It’s not just your online security that could affect the likelihood of your business being affected by a scam. In many cases, your employees, particularly those with financial responsibilities, could be exploited too.
3 ways to help your employees prevent scams
1. Make scam awareness part of your employee training
Your employees might not be aware of the common scams that could affect businesses and miss the warning signs as a result. Indeed, the HR Review survey found that 48% of businesses fail to provide any cyber security awareness training to employees.
Some members of staff might benefit from further training too. For example, you might want to cover how to check if an invoice is legitimate or what to do if a payment seems suspicious to employees who work in your finance department.
2. Make scams part of conversations at your business
Mentioning the risk scams pose once during training and then never talking about it again could mean employees forget the warning signs or that your team aren’t aware of the latest tactics fraudsters are using. So, next time you read about a scam or hear of another business being affected, a conversation about it could be valuable.
Making scams a topic of conversation could also help employees feel more comfortable raising a potential concern.
3. Keep on top of your finances
Whether you go through the accounts yourself or a trusted employee handles this task, scheduling regular reviews could be helpful. It might mean you spot irregularities far sooner and can minimise the damage a scam does to your business.
We could help you identify a scam
If you fall victim to a scam, it’s often important to act as quickly as possible. If you’ve provided account details or sent money, contacting your bank could potentially prevent losses. You can also use Action Fraud to report a crime.
If you’ve received an email and you’re not sure if it’s a scam, whether it’s related to your personal finances or those of your business, we could help. We may identify the warning signs or red flags you’ve overlooked.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.