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Fraud against SMEs – ignore it at your peril

Fraud and financial crime against small business is on the rise but two in five small businesses don’t bother reporting crimes against their businesses. This surprising statistic was revealed last month by The Federation of Small Businesses.

Why aren’t businesses reporting fraud?

Despite this increase, nearly half of small business owners questioned said they didn’t think reporting fraud and financial crime to the police would achieve a positive outcome.

Protecting your business, and your industry

Like all crime it’s only by sharing information about the crime that it can be solved, and future similar crimes prevented. That said businesses are shying away from protecting their future.policeman

KPMG’s most recent fraud barometer shows that the volume of fraud in Scotland committed by employees and management against their employers increased by 83% in 2015 so it’s important to actively push back, but how? Businesses need to be aware of the legal options open to them if and when they fall victim to fraud.

The options

Police reporting is only one of the decisions to be made in this situation. Legal advice should be sought as soon as possible about whether it will also be possible to recover losses by going down the civil route.

Whilst the law in this area in Scotland is not yet as developed as it is elsewhere in the UK, it is possible to freeze assets such as bank accounts and prevent the sale of property owned by the perpetrator within hours of discovering the fraud to secure the recovery of losses.

The vital first 24 hoursfile0001447089305

Successful recovery is dependent on quick and decisive action by management in the first 24 hours of discovery. There needs to be a commitment to front-load the investigation to uncover information about the fraud itself and the perpetrator’s assets. This is most likely to prevent dissipation of assets.

Fiona Grant is a Certified Fraud Examiner who has experience of recovering fraud losses through the civil courts on behalf of businesses, charities and public sector clients and is well placed to give advice on the options available to clients who find themselves in this position.

If you have any questions regarding fraud you can get in touch with Fiona Grant on 01383 721621.

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