Business directory, procurement and office supply fraud
Business directory fraud
Your business receives a form in the post or by email, appearing to offer free listings in a business directory. It’ll ask you to return the order form even if you don’t order anything.
However, in the small print, it says that by returning the form, you're committing to an order and will pay for ongoing entries in the directory. This costs your business hundreds of pounds a year.
An increasingly common scam is when the scammer phones businesses to offer advertising space in a publication supposedly linked with the emergency services or to a recognised trade body, or is itself an industry-specific magazine.
In some cases they send companies a glossy copy of the magazine to encourage them to buy an ad in it. But often these magazines are not actually printed in bulk or distributed and if they are, the circulation is a lot lower than they say.
Some businesses have received debt recovery letters for adverts they never agreed to place.
Make sure you do your research before agreeing to anything.
For more information and help or to report this and many other types of fraud, go to Action Fraud, the UK’s national fraud and cybercrime reporting centre.
Procurement fraud
Procurement fraud is on the increase. Any employee responsible for procurement could commit fraud. Identifying the risks is difficult, but take a common sense approach.
What you should know
An employee could create a record for a fake company or for a legitimate company you don’t do business with. They then transfer money to the company, controlled by either the employee or an outsider.
In customer fake-invoice scams, fraudsters send an invoice or bill to a company, asking for immediate payment for goods or services. The invoice says the due date for payment has passed and threatens that if you don’t pay it’ll affect your credit rating.
In fact, the invoice is fake and is for goods and services you haven’t ordered or received.
An employee could also intercept and change payee details and amounts on cheques and payable orders, then cash them.
Employees could also:
- authorise payments for themselves
- collude with suppliers to gain contracts
There may be conflicts of interest. For example, an employee has a financial interest in the success of a supplier, but their goods and services are more expensive than those of other suppliers.
Suppliers may also try to encourage business by offering anything of value to influence a decision.
Minimise your risk of fraud
Never change payment details because of a single phone call or email; check with your usual contact that the new details are real and correct before making any changes.
Make sure that the business needs the goods or service being provided.
Regularly review your accounts to find anything that doesn’t seem right.
Ask your staff to identify and challenge inappropriate behaviour.
For more information and help or to report this and many other types of fraud, go to Action Fraud, the UK’s national fraud and cybercrime reporting centre.
Office supply fraud
Office supply fraud is where telemarketers trick employees into ordering and paying for stationery, such as toner cartridges.
A caller tells the employee that a colleague or former colleague already ordered office supplies. To convince them it’s genuine, the caller says they’re chasing up a signature to complete the order.
The company is then invoiced for unwanted and often overpriced stationery and office supplies.
If the company tries to return the goods, it can’t because it signed the order form and agreed the order over the phone.
If a member of your staff is responsible for buying office equipment, consider due diligence. Always use your existing contacts and if the business is not regularly known to you, keep checking. Use a risk-based approach to help prevent fraud.
For more information and help or to report this and many other types of fraud, go to Action Fraud, the UK’s national fraud and cybercrime reporting centre.