Equifax warn SMEs over fraud |
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| Management | |
| Written by Roberta Murray | |
| Wednesday, 14 October 2009 | |
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Too much focus on day to day business could be leaving SMEs open to fraud. Equifax is warning that the proprietors of SMEs may be so focused on day to day survival that they could miss other threats to their future. Equifax say their fraud team has seen an increasing prevalence of frauds being committed against SMEs.“We wonder whether this is one of the consequences of the recession” commented Neil Munroe, External Affairs Director, Equifax. “The owners and managers of these businesses, already under increased financial pressure, have limited time to ensure they aren’t falling foul of clever fraudsters. But unfortunately, the fraudsters know this and are making the most of the opportunity. And that’s why it’s crucial for National Identity Fraud Prevention Week to continue to raise awareness of the risks so that businesses and individuals do all they can to protect themselves.” According to a recent survey of UK small businesses conducted by Equifax, there are also some worrying trends in business owners’ perceptions of the fraud risks that might threaten their organisation, with limited precautions being taken as a result. “Whilst there seems to be a pretty good awareness of the financial fraud that might affect a business, there seems to be a real lack of awareness of the risks of online fraud and company identity fraud”, continued Munroe. “Yet these are both relatively easy frauds to perpetrate and the ones that probably need the greatest level of monitoring to protect a business.” Equifax asked respondents to its survey to rate the forms of fraud and identity fraud that they thought would be of most threat to their business, scoring from 1-10 for least to greatest risk. Company identity fraud came in at 4.5, followed by deliberate bad debt – that is where companies have opened accounts with no intention of paying - at 4.62 and online banking fraud at 4.75. Interestingly, what are considered to be slightly more sophisticated frauds seemed to be rated higher by business people. Long firm fraud, where a fraudulent business is set up to defraud legitimate businesses was rated at 5.14 and phoenix fraud at 6.36. It could be that businesses perceive these types of fraud to be more financially damaging. But does that mean they are missing the frauds that are easier to perpetrate? When businesses were asked what precautions they take to protect themselves from the variety of frauds that can affect their future stability, regular checking of bank statements and shredding of financial documents both came top of the list at 93% each. These were followed by credit checking of all new customers at 87%. However, only 50% of respondents regularly check their own business credit report which again seems to illustrate a lack of awareness of corporate ID fraud.
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