THE creation of fake companies, fraudulent applications for credit, and the use of stolen credit cards all increase in the run-up to the festive season as fraudsters look to take advantage of busy companies and busy staff to cover their crimes.
But good credit management practices, credit checks, and even the use of Google Earth to ‘see’ whether a company is genuine can all help according to leading business organisation, The Chartered Institute of Credit Management (CICM).
In a straw poll of CICM Members, 28 percent said they normally see an increase in fraud at this time of year, and almost a third that the fraud could have been avoided with the benefit of hindsight. The losses could be considerable. Of the 24 percent who had fallen victim to fraud in previous years, 18 percent had suffered losses of more than £10,000 and 12 percent of more than £50,000.
More than three quarters said that their banks had done little or nothing to help them recover their loss when there had been an opportunity to do so.
Philip King, Chief Executive of the CICM, says that he believes the survey is representative of the experiences of the wider membership: “Credit managers are very much ‘on the front line’ when it comes to identifying fraud,” he explains, “and are therefore a good barometer for ‘real’ business volumes and activity.
“Before Christmas, new orders and new business opportunities tend to increase. Fraudsters take advantage of these busy periods, and natural ‘spikes’ in activity, to commit crime.
“Only by sticking to best-practice credit management, sharing knowledge of risk with your employees in what to look for, and being sure that you ‘know your customer’, can fraud be avoided.”
He added: “Anyone witnessing a sudden and unexpected increase in orders, or the emergence of a new customer with whom they have not previously done business, should be alive to the potential for fraud,” he adds.