In Focus Commercial Credit In 2011, the secretary of state for business,
reformed the law, enabling anyone with an internet connection, anywhere in the world, to create a UK company. Whilst the concept of making the UK
one of the easiest places to do business, and give entrepreneurs a chance to flourish, should be applauded. The reality of removing any checks to
identify the person setting up a company, just made the fraudsters job, much, much easier. The recent white paper on the reforms of
Companies House is much welcomed in order to help tighten up the UK’s stance on verification of principles of a business prior to the formation of a company.
Draft a clear fraud profile Risk factors vary from one industry sector to another, from one business to another. For instance, car-leasing companies will
be reluctant to deal with a customer whose head office is registered at a holiday resort address, while a supplier of garden furniture will find itself commonly dealing with a business with a similar address. This is exactly why it is so important for firms to determine their own risk profile
On top of this, the risk process must be up-to- scratch, without losing focus on commerce. It is a bit like a decision tree. If this, then that. Which steps do we take when conspicuous details emerge?
and screen new customers and every order that stands out accordingly. As said, fraudsters are becoming more
cunning by the day. Someone registers a private company, places two small orders, and pays for them as expected. Nothing to worry about, it seems. And
so, that business passes the screening. Then the third order comes in, a
significantly larger one, but when the invoice is suddenly due, they have disappeared. That is why a business needs to properly investigate every new customer. What remarkable details or trends can we be uncovered? But equally important is
a process to limit the risks involved with larger orders. It all starts with drafting a proper profile. What characteristics do we look for to determine whether we need to look closer at a potential customer or order? It is not something you can do solely based on your own data or public sources. Especially when a business grows, this
requires smart data solutions that would allow you to monitor transactions and that instantly provide you with a complete picture of the business or contact person. Think, for example, of the checks into
managerial changeovers, high staff turnover, conspicuous fluctuations in order placement, blacklists, sanction lists, private company structures, affiliated bankrupt businesses, or characteristics that constitute an elevated risk level within your specific sector. On top of this, the risk process must be
up-to-scratch, without losing focus on commerce. It is a bit like a decision tree: if this, then that. Which steps do we take when conspicuous details emerge? And how do we prevent focusing too much
on limiting the risks and thereby restricting the healthy flow of business? Risk limitation is a matter of finding the right balance between revenue and risk. CCR
November 2019
www.CCRMagazine.com
15
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52