Dunoon & Cowal Business Association

BEWARE of BUSINESS FRAUD

Overview

This bulletin is issued by the Scottish Business Crime Centre Liaison Unit of the Scottish Crime and Drugs Enforcement Agency (SCDEA). It is based on assessment of intelligence from the Scottish Financial Crime Group; The National Anti-Fraud Network and NHS Counter Fraud Services. The intention of this bulletin is to promote and support effective business crime information/intelligence sharing between the SCDEA and the Scottish business community. Our aim is to reduce the harm caused by serious organised crime and to make Scotland a hostile environment for serious organised criminals.

Bank Account Take Over Fraud

An account takeover happens when a fraudster poses as a genuine customer, gains control of an account and then makes unauthorised transactions. Any account could be taken over by fraudsters, including bank, credit card, email and other service providers.

Organised criminals purport to be representatives of a genuine supplier company. The fraudsters send letters, facsimiles and/or emails to accounts payable staff and request that the current bank details for genuine supplier companies are changed to bank accounts which the fraudsters have access to. The genuine supplier companies are unaware and it is only after they make contact with businesses in relation to non-receipt of payment, that the fraud becomes apparent. Often by that time, the fraudsters have emptied the bank accounts that the monies were redirected to.

This fraud continues to grow across the country, it is therefore absolutely essential that this bulletin is shared with all relevant personnel involved in the maintenance of creditors' bank account details to block all fraudulent attempts to inappropriately amend these details.

The scope of this activity is widespread and it has extended to local authorities and other organisations including private sector companies. The fraud is organised in the following way:

• The fraudsters target large supplier companies, this is possibly as a result of tender documents or publicised creditor lists.
• Often email addresses on letters submitted use extensions similar to that of the genuine companies, but which are in fact operated by the fraudsters.
• The fraudsters have called telephone switchboards asking for contact names responsible for authorising payments in order that correspondence is directed to the relevant staff members.
• Supplier details such as telephone numbers have been requested, presumably to be added to the fictitious requests to add authenticity.
• There are examples of the fraudsters telephoning to chase payment, in the hope that some checks might not be carried out.
• Company Secretary, Finance Directors and other authorised contact details, including signatures are correct - almost certainly having been scanned from published information available from various sources including the internet.

National Anti-Fraud Network

The National Anti-Fraud Network (NAFN) has issued intelligence bulletins to it's local authorities. The fraud within local authorities initially centred on requests to change bank details relating to construction companies that are frequently engaged on current capital construction projects within Council areas. This information is widely available through contract award notices and general publicity surrounding what are often significant projects in terms of monetary value.

See the news article:

http://www.constructionenquirer.com/2010/10/29/swindler-arrested-over-construction-invoice-scam/

Companies House Fraud

Companies are at risk because fraudsters can submit fake papers to Companies House and have the details of the director or official address of the company changed. Fraudsters can then run up huge debts in the name of a company which knows nothing about the fraud until it is too late. Companies can prevent fraudsters from changing their details by registering for the 'Proof' system at Companies House. This means that companies can only change their details online using a password and confidential authentication code; and by using a registered email address. These security measures make it significantly more difficult for fraudsters to commit any fraud at Companies House, as long as companies keep the password and authentication code secure. Contact Companies House for more detail on this.

Recommendations

• Remind staff not to provide genuine supplier companies reference information via the telephone.
• Review and verify bank account and single point of contact information for all supplier companies.
• If you receive a letter, immediately place it in a suitable document holder to protect it as it may be subject to forensic examination.
• Do not use the details supplied in the letter, fax or email to contact the company.
• Take steps to ensure that appropriate confirmation is obtained from supplier companies regarding any changes to business bank account information or key business personnel information.
• Check all details on any request for change against the information already held. This will include company names, contact numbers, company registration numbers, VAT numbers, addresses, web addresses and all email addresses.
• DO NOT use Companies House to verify information.
• Telephone the contact number for the suppliers head office noted on previously paid invoices and confirm the change.
• Contact police if attempted fraud is identified.

If you have any queries re this or any other matters please do not hesitate to contact:

Scottish Business Crime Centre Liaison

Scottish Intelligence Co-ordination Unit

Scottish Crime and Drugs Enforcement Agency

Direct dial: 01506 524 548

Email: SICU-DESK@scdea.pnn.police.uk