Commercial Fraud – Manage The Symptoms And Avoid Catching A Cold
By Alex Hilton-Baird
As with all ills, prevention is better than cure as they say, and commercial fraud is no exception. Like most crimes though, commercial fraud is viewed as something that happens to someone else. The reality is it is often far closer to home than most people realise. And, while ignorance may be bliss, it is also a sure fire way to leave your company wide open to abuse.
Fortunately, there are plenty of telltale signs that should help to trigger those alarm bells. The key, like...
...any good Ruth Rendell murder mystery, is recognising these early. It is important to remember that most fraud is committed because your suppliers are under financial pressure, so if you have a group of key suppliers, it is wise to review their trading status regularly; quality issues, late deliveries and CCJ’s could mean cash flow problems, while changes in key personnel or different professional advisers could be a sign of asset-strippers moving in.
Look out too for sales of stolen property or double retention of title from suppliers down the line as these could pose a very real threat, as are substandard goods or parallel and grey imports.
Other indicators of potential fraud include constant verification of a debt from a third party, being pushed for early payment; delays in filing accounts or a change of year-end. And if you get a big payment from a company you don’t recognise, think twice about banking it, as the signatories may well be using it to get a legal cheque reissued by you to wash out or cover up their fraudulent invoicing. Finally, if a supplier asks you to verify a balance that doesn’t exist, beware, the... continued on page two >