DWF technical director Daksha
Mistry presents a strategic plan to cut crime.
Go deeper with GlobalData
What does your business do to fight
fraud? If the answer is ‘nothing’, then you may soon find yourself
joining forces with other parties to change this.
This is because the National Fraud
Authority (NFA) has led the way for the government and various
industry representatives and enforcement organisations to get
together and look at how to share fraud intelligence and tackle the
issue.
The new strategy, Fighting
Fraud Together, outlines several ways that the situation will
be improved for businesses, including:
- Awareness:
advice tailored for sectors will be made available to help
companies understand how they may be at risk. A new research tool
will be introduced to help businesses, and Action Fraud will expand
its reporting to include all financially motivated online
crime. - Prevention:
intelligence will be shared more effectively between businesses to
help combat fraud. This bank of knowledge will be particularly
helpful to small and medium sized businesses, as they require more
practical prevention advice. -
Enforcement: enforcements will be made more
responsive to disrupt fraudsters’ activities and close them down.
There will be a move to increase the use of the civil litigation
system and to provide more redress and support for
victims.
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By GlobalDataWhy now?
The new government strategy has
come at just the right time. Criminals are more sophisticated,
technically capable and are operating more effectively across
borders. Fraudsters are continually looking at ways to exploit the
weaknesses of both individuals and businesses, and new technologies
are making the process easier for them.
The financial loss to victims is
huge. The NFA’s 2011 Annual Fraud Indicator revealed that
the financial services sector had been hit with losses of £3.6bn,
while retail, wholesale and distribution incurred losses of
£2.7bn.
The report also found that the
manufacturing sector incurred losses of £945m, construction and
engineering £567m, rental £314m and consumer goods £294m.
These are staggering figures, to
say the least, and the increase in the number of cases going
through the courts is further proof of the escalating problem.
Most cases relating to the asset
finance sector involve the failure to deliver or the removal of
assets out of the country, along with identity fraud.
What can businesses
do?
As fraudsters generally weigh up
the risks and benefits before deciding to perpetrate a scam, it is
vital to be one step ahead of them. A simple way that businesses
can strengthen their security is to ensure that there are always
contracts and trading agreements in place between financiers,
brokers and dealers.
Carrying out due diligence checks
of customers, and obtaining signed acceptance certificates, as well
as confirmation of delivery notes, are also essential to minimising
losses.
It is difficult to monitor goods
when they are not viewed at the time of purchase. Therefore,
financiers need to regularly check assets during the lifetime of
the contract. It’s also important to invest in a decent tagging
system and subscribe to a good fraud prevention data input and
tracking system.
Fight together
There is now additional help for
companies in the finance industry to locate their assets, thanks to
the introduction of new security and monitoring systems.
What’s more, with the government
looking to strengthen enforcement procedures by working with civil
litigators, and improving the systems that are already in place,
this means that we are much closer to fighting fraud together.
Daksha Mistry is technical director of banking and finance
at law firm DWF
