In Focus Commercial Credit


Preventing fraud: a game of cat and mouse


Fraud not only leads to financial damage, but can seriously harm reputations. In some cases, this could have been prevented by simple measures such as stringent checks


Craig Evans Fraud expert, Graydon


Annually, thousands of businesses fall victim to fraudulent customers. Footlocker, for example, recently got swindled for €1.8m by a fake company called Ups Consultancy. This case also involved ING being fined on grounds of negligence in its due diligence of fraud and was widely reported on in the media. So, fraud not only leads to financial


damage, but can seriously harm reputations as well. In some cases, the damage could have been prevented by simple measures such as stringent checks. Every day, fraudsters are becoming more


cunning and the methods constantly change shape. In 2018, we identified £500,000 worth of suspected frauds across the UK with CCJs amounting to an average of £7,000 loss every week. So preventing fraud is a game of cat-


and-mouse. The fraudster comes up with a money making or product claiming scheme and constantly tries to outsmart you in its execution. They constantly switch to different tricks, so it is key to figure out every one of those tricks as quickly as possible. By investigating data trends, we are


discovering new types of fraud more and more quickly and we manage to get a step ahead of the fraudsters. I would now like to share three focused


areas for recognising fraud more quickly based on data trends and thus three ways to improve your ‘cat and mouse game’.


View the business in the context of industry sectors Especially where an organisation conducts business with many external parties, a quick


14 Looking at several fraud cases, we


Once fraudsters see that their trick is working, they will try to pull the same trick on similar businesses. That is why fraud trends within an industry sector can point towards new forms of fraud, allowing your business to become aware of them faster


check via Google Street View and LinkedIn simply does not suffice. To get ahead of fraudsters, businesses


should instead be establishing a reliable benchmark to compare with other businesses in the sector. Once fraudsters see that their trick is


working, they will try to pull the same trick on similar businesses. That is why fraud trends within an


industry sector can point towards new forms of fraud, allowing your business to become aware of them faster. But that is not a matter of setting it up


once and putting your feet up as you enjoy the fruits of your labour. With our onboarding and detect solutions,


we continuously analyse and discover new trends in data that could indicate fraud. For example: fraud is a huge issue among


car-leasing companies. Fraudsters manage to make off with hundreds of vehicles each year.


www.CCRMagazine.com


discovered that many of the fraudsters were registered as residents of holiday resorts. That has now been added to our solution as an ‘exception’, a remarkable detail. As soon as an application is made by a


company at a holiday resort address, leasing companies that subscribe to our services receive a notification and explanation. The leasing company is then able to


undertake further research of its own. These are things that you would not know if you do not benchmark within your sector.


Keep an eye on the media Another way to stay alert for fraud trends is by closely following the media. Fraud cases that are reported on in


the media are a starting point for further investigations. A common trend identified in the UK


media has been the ability of fraudsters to hide behind serviced or virtual offices, and benefit from the lack of red tape around starting a business. Prior to 2011, only registered company-


formation businesses were able to access Companies House’s web portal to set up companies online and, therefore, all registered companies could be traced to a verifiable existing person. Fraudsters tend to be creatures of habit,


where they have been successful before they will almost certainly use the same approach again. Historically, we have monitored a number of formation agents (in particular their registered addresses), known to have been used by fraudsters, for suspect activity.


November 2019


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