Business fraud - free wefinda guide to low cost prevention.

In our weekly news of 16 July we reported that according to the National Fraud Office 15,000 people had reported being scammed by fraudsters in the first six months of 2010. With £3.5 billion being lost by individuals and businesses to fraudsters every year, even taking a few small steps to protect your firm will pay dividends. We thought we’d give you a few handy hints on simple fraud prevention methods that won’t cost the earth.

Cheque books – one of the oldest and simplest methods of fraud in the book. Leave your company cheque book lying around in an unlocked drawer and the fraudster will take one cheque from near the back of the book. If the fraudster has time they’ll also pinch a copy of one of your letters so they have your signature and the first you know of it is when the money has gone from your bank. Always lock up cheque books and when a new book arrives from the bank note it in your records and keep it safe. Better still, with the banks phasing out cheques, start the move now to electronic banking. Make sure you choose a bank which will offer you dual authorisation as a minimum and keep passwords safe.

Company stationery – leave headed paper lying around and the fraudster will use it to arrange bank transfers or order goods in your name. Always lock up paper at night and don’t leave it lying around during the day in a place that visitors can access.

Invoices – scammers will send you invoices for entries in business directories or for goods that haven’t been ordered. Make sure that invoices are signed off by the person or department head that received the goods or service. Also make sure that decisions on ordering are not left to a junior member of staff. We have seen a situation where the junior was left to order stationery. They ordered paper from a firm which charged four times the going rate, sent and charged for additional unordered items and then sent incentives to the junior in the form of drink and vouchers. Make sure you have a strict policy on incentives and that all orders are reviewed by a second person.

Data – recent surveys gave the worrying statistic that some 89% of businesses regularly transferred data using unencrypted memory sticks and even among data professionals 52% still don’t protect data. With data loss not only leaving you open to fraud but also to a potential fine from the Data commissioner’s office, a strict policy of data care will pay dividends.

People – we are sure that you take and check references on your staff, but what about casual visitors to the office? Do you make them sign in and then assign a member of staff to accompany them around the office or do you just let visitors wander wherever they want. Worryingly a badge and a “just come to service the photocopier” gains instant unquestioned access to many offices. Take references on firms that you use regularly and make sure you know who is visiting the office.

In summary, secure data, cheques and passwords; put a few basic checking procedures in place and make sure that staff are aware of their role in preventing fraud. This may not stop the determined fraudster but you will stop most opportunist frauds and whilst these procedures won’t cost the earth they may save your business.