EXTERNAL THREATS

There has been a major increase in recent years in incidents of company identity fraud. This is essentially the hi-jacking of your company. These frauds, which have developed from the Long Firm Fraud, have increased due to the ease of access to company documents via the Internet. Hi-jacking a company involves an organised gang of fraudsters taking over your company name and/or credit rating without your knowledge. It is not until suppliers begin chasing for payment on goods you have not ordered and your business credit rating has plummeted that you know that you have been a victim of this type of offence. Some estimates put the costs of this type of fraud to UK companies at £ 1.34 billion last year. A very recent development in this area is the theft of the identity of company officers after which the offenders obtain loans and mortgages.

Computer Hacking is also a major problem either as part of a company hi-jacking to obtain identity data or to obtain banking information with which money is stolen from the company bank account. The banking information combined with the indentity data can also be used to obtain loans, the proceeds of which are transferred to accounts around the world, outside the reach of UK authorities. In such cases the offenders are usually not UK based leaving UK investigators with very little hope of tracing them or the stolen money. A victim in such a case will be left to sort out with the lender who are themselves a victim the issue of liability.

Long Firm Frauds are still popular with fraudsters. The Long Firm Fraud or LF as it is known will typically net £ 750,000 for the fraudsters. Organised gangs will typically have three or more running at the same time with the sole aim of defrauding creditors and evading prosecution. The LF, which began 50 or more years ago has developed and exploits international borders as well as lax credit controls and insolvency systems.

There are also the smaller value frauds, which on many occasions go unreported simply because the victims are unaware they have been defrauded. The Publishing Fraud being an example. Your company is asked to buy advertising space in a charity or community publication for a nominal fee, very often the publication will be promoting crime prevention and purport to be supported by the law enforcement agencies. The publication never materialises and the fraudster keeps the £ 100-£ 200 fee. The offenders rely on the victim not chasing up the advertisement because the amount involved is comparatively low. A fraudster with a small team of innocent low-paid youngsters cold calling businesses from a telephone directory can soon net more than £ 1 million.