SMEs warned over rise in targeted frauds

Small and medium sized firms have been urged to take extra steps to address the risk of scams targeting their companies. In a survey from UK finance, 80% of SMEs said they had received an unsolicited text or email request for money and personal information, and 64% had received unsolicited phone calls.

It warns that as many businesses start the new year with people working from home, fraudsters will try to take advantage of opportunities to steal money where firms might be working outside of their normal processes. Criminals often attempt to impersonate a chief executive, senior manager, or supplier to try and convince staff to make an urgent payment or to change the existing bank account details held on file.

These scams result in the victim transferring money to a criminal. UK Finance figures showed that in the first half of 2021, businesses saw £59.2m lost to these frauds, an increase of 35% on the previous year. A survey by the banking and finance industry group also found that although 62% of SMEs claim to be more aware of fraud since the start of the pandemic, one in six (16%) did not challenge an unsolicited phone call requesting money or personal information.

Katy Worobec, managing director of economic crime at UK Finance, said: “Criminals are continually becoming more sophisticated and are experts at impersonating people and suppliers. As we start the new year, businesses should make it a priority to be wary of any unexpected contact requesting an urgent payment and to be careful with the type of information you share online about your business. The banking industry is tackling fraud on every front, but it’s important for businesses to always stay alert.”

Data collected by Barclays has shown that between January and October 2021 the sectors reporting the most cases of SME scams were property and construction (24%), retail and wholesale (18%), business services (15%), and manufacturing and transportation (12%).

Martin McTague, Federation of Small Businesses national vice chair policy and advocacy, said: “Business crime is a serious issue for small firms right across the country, with fraud being one of the key problems at hand and one that has only been accelerated due to the increase in online trading and e-commerce during the pandemic.

“Small businesses face almost four million cases of cybercrime each year, predominantly focussed on malware and fraudulent payments, so the need for vigilance has never been more important.”

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