Kennedy’s Confections is a family-run chocolate and confectionary magazine based in Kent. SME spoke to owner Angus Kennedy, who is also known for giving talks on the world of confectionary and eating chocolate for a living.
• In your blog, Friday Light you mentioned that you have recently had some money fraudulently taken from your business – do you know how this happened?
Yes it took some detective work (literally) but a criminal gang faked my identity and then posed as me by emailing my accounts department (who thought it was me) and asked my staff to transfer two direct bill payments amounting to just under £30,000 without my permission. I keep saying to this day ‘how did it happen?’ but it did. When things like that happen you can’t think of the ‘what ifs’, it’s just too late. Yeah, I mean I lost all my company cash and the company was heading for the rocks with no rudder – it was a crazy time.
• What action did you take immediately after discovering the loss? Is the money recoverable?
Well I phoned the banks, the solicitors, insurance, then the person resigned that made the payments too. I called the insurance company first and they said it wasn’t covered and the bank said it was non recoverable and the police said they were looking into it. Basically, the money has gone. No one really seems to care.
I immediately started to cancel any direct debits and it was and still is ‘essential spending only’. I remember last month I had a pile of invoices and not enough cash to pay them. You have to stay cool. On the day it happened I went to the gym and attacked the punch bag. That really helped. I believe you have to be fit and to have a release –it’s worked for me for 30 years.
• Could it have been prevented? What measures will you be putting in place to ensure that this cannot happen again?
Well yes, I should not have given my staff so much trust and authority. I should have made it so that they simply were unable to make such large payments. I should have made it so that any payment over £5,000 required two signatures.
• You have also mentioned how some of your staff have left since the money was taken – how are you coping with this? Have you started recruiting? What sort of things will you be looking for in your new hires?
Well yes they have left, we had three resignations. We used to have seven people four months ago and now I have two employees rattling about. It’s like OMG, is this for real Angus? It’s just a load of empty desks. As I said, I have been cutting all spending hugely. Everything from the water machine to franking machine. We are looking for a cheaper office too. I have no sales team and well, I have been through a lot of hardships in life, so this is nothing to be honest. I am just picking up the phone and selling myself. You have to or you go down with the old ship. But there are forest fires in nature for a reason. It’s a real cleansing and almost enjoyable.
• Have there been any other associated challenges?
Yes of course. I had to start all over again, I mean I had no accounts team for example and we had a lot of money owed to us, so my wife and I just got calling people and telling them the truth. If you don’t pay we fade away, we said. We have great customers, you need that as it’s always them that make your business decisions in the end. I think running a business is a challenge as it is anyway. So this is just slightly more challenging than usual, but you are still doing the same old things. When there is a crisis you just do more of what you did anyway: selling, serving, chasing the cash and doing it again day after day until you are done.
• How is your business coping with the financial loss/ what measures have been introduced to get back on top?
Well it’s been tough on me personally, it’s a small family business and my wife and I are cleaned out for Xmas. But I see hardship as an essential manufacturing of the soul. We don’t learn anything in life if it’s all an easy ride. So, to be honest, I have learned to brush it off and get up as I always have done; if you can’t lose, don’t be in business, do something else.
Well we did all the normal security things like new banking access, new credit cards and we just changed everything. The criminal gang are still trying to hit us now so we might move office soon and I have been getting funny calls on my mobile. I also decided to contract out my accounts and never employ a bookkeeper again directly – that was the final straw.
• What would your top tips be for SMEs when it comes to fraud/cybercrime?
Every one focuses on virus software, but to be honest this was someone faking my email address. Anyone can do it. Be vigilant and always make sure you employ the most professional, qualified people you can afford. One mistake and it could be game over. Put in systems where two signatures are needed for payment actions like we are and be there all the time and don’t give too much trust. Don’t hide behind computers, teach your staff to share problems and issues.