Whenever the economy is close to crashing, fraudsters take advantage and use this opportunity to commit fraudulent activities. That’s why in March the National Fraud Intelligence Bureau (NFIB) reported a 400% increase in fraud related to COVID-19. The NFIB also reported total losses of £970,000 due to fraud.
With E-commerce growing in popularity massively during lockdown, online sellers are particularly vulnerable to payment fraud occurring on their online stores. However, all small businesses across the UK are currently at risk and need to be wary of the different types of fraudulent activity that are taking place.
In this article we will present the types of fraud that have been most commonly experienced by both online and small businesses in recent months. We will also explain what you can do to protect yourself and your business.
Online payment fraud – particularly important for E-commerce businesses
With social distancing still in place across the UK, E-commerce transactions have increased greatly. To keep up with demand, businesses with online platforms feel the need to reduce the security controls on their site to offer a smoother transaction experience. However, those looking to commit fraud will use this as an opportunity to slip under the radar unnoticed and they will find it easier to use illegitimate payment methods, hack online platforms and obtain credit card details.
How can I combat online payment fraud?
Even if many customers are making orders on your site under the coronavirus crisis, it is a bad idea to relax the security measures on payment transactions to allow for a more streamlined experience. Always keep the security checks in place, and consider installing fraud protection platform, such as an Address Verification Service (AVS) – this validates the customer’s billing address and card issuer.
Text messages and e-mails that pose as trusted organisations
A common trend which has been occurring within the last 3 months is businesses receiving hoax e-mails which claim to be from government organisations such as HMRC or health research groups such as the Centre for Disease Control and Prevention (CDC) and World Health Organisation (WHO).
The e-mails from fraudsters posing as HMRC have reportedly been offering grants to businesses and include a link which is used to capture sensitive information when clicked. Fraudsters posing as health research organisations have been sending e-mails which claim to provide advice on coronavirus, when in fact the e-mails also include a link used to capture the businesses’ private credentials.
How can I combat scam text messages and e-mails?
If you receive a text or e-mail claiming that it is from HMRC or a trusted organisation, always check that it is genuine before you respond or open any links or attachments in the e-mail, and do not enter any personal information or bank details. You can follow our checklist on how to identify HMRC phishing e-mails by following this link.
Fake supplier websites
As many businesses are struggling to meet demands they have to turn to new suppliers for products. But there is a risk involved when purchasing products from unfamiliar suppliers, as fraudsters frequently pose as them. They use fake websites to do this, luring the victim in so that they provide payment details and then do not receive any supplies in return. Businesses also need to be wary of any telemarketing calls they may get that trick them into ordering supplies.
How can I avoid being scammed by fake supplier websites?
It is a good idea to always check that a supplier is genuine before you buy from them. Carry out research, check to see if they are on Companies House, and check reviews also – remember, if it feels like a scam, it probably is!
Fake investment scams
Starling Bank has reported that there has been an increase in investment scams during the current coronavirus situation. Investments can be very attractive to business owners, particularly when a lot of money can be made – that’s why fraudsters are targeting businesses with offers to make money by making false claims, e.g. they are about to discover a new cure for COVID-19. In particular, social media platforms such as Instagram are Twitter are being used to promote “high returns on low risk investment” opportunities.
How can I avoid fake investment scams?
One of the most important things to remember is that if an investment offer sounds too good to be true, it probably is. It is also always a good idea to check the Financial Conduct Authority (FCA) register to make sure that any organisation you have been contacted by is legitimate.
We are here to help protect you from fraud
At J&P, helping small businesses is our passion, and we understand that companies across the UK are at risk now more than ever. If you need any advice on how to avoid fraud and protect your business online, please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
