As businesses increase their digital presence and undertake more activity online, the risk of fraud and theft should be carefully considered with sufficient controls put in place to help minimise the risks posed.
Fraud and theft within the agricultural sector continues to be a significant issue and can cause businesses both financial and emotional stress which can be hard to recover from. We have seen several sophisticated scams target the sector with significant losses as a result.
Technology is increasing at an ever-faster pace and when used properly can provide valuable efficiencies. However it also comes with inherent risks which should be assessed and managed.
Many of the major banks now run specific fraud and theft seminars to raise awareness of the issues and how best to protect against them. We have also seen many insurance companies offer specific online fraud policies as generally these are not covered in a standard combined agricultural policy.
A large proportion of the fraud we have seen stems from paying suppliers online. Care should always be taken when paying online, especially if it is a new supplier or there has been a change of bank details. Internal controls such as confirming bank details on the phone via a trusted number or sending a small payment (1p) prior to the balance to ensure it arrives at the correct destination. There has also been a significant increase in email accounts being hacked and email chains intercepted. Fraudsters then continue the email chain and provide fraudulent bank account details for payment. It can sometimes be very hard to distinguish between the two, leading to payments being made in error under the guise of a genuine transaction.
Time should be taken to read over all correspondence prior to payment as the language used by the fraudsters may differ from the genuine supplier helping to identify the issue before payment is made. Generally, they may use more aggressive and high-pressure language to secure the payment prior to being discovered.
If you are in any doubt over the validity of an email or invoice you should also contact the business directly for confirmation from a trusted source.
A “take five” approach to online payments is advisable, whereby before any payment is sent, you step back to review all the details of the transaction to satisfy yourself before making payment.
All hardware used within the business should be protected from online threats via up-to-date antivirus and malware software. Firewalls should also be set up to help protect against attacks. Professional advice should be sought if you are unsure if there is adequate protection in place. It is now very common for a lot of business to be done via smartphones as mobile banking overtakes online banking.
As such, business owners and employees should ensure they have adequate protection on their phones such as pin numbers, fingerprint and face recognition and antivirus software.
This article was prepared by Scott Greig, principal manager in EQ Accountants’ Cupar office.