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Financial fraudsters target small business owners

Small businesses are especially vulnerable to fraudsters according to new research.

A report by Financial Fraud Action UK (FFA UK) has found that the most common targets for fraudsters are managers and business owners in SMEs, followed by employees in large companies.

FFA says that 28% of businesses have already fallen victim to a scam or been targeted in past two years; yet 69% of business leaders and managers admit they have not taken any action to protect their business and employees.

The research finds that 48% of business leaders have little or no concern about the threat of financial scammers; 49% believe it is unlikely to happen to their business. In addition, 37% of business leaders admit they have never spoken to employees about fraud, despite the fact that in a quarter of scams an employee is approached directly.

Common business scams include invoice fraud - where a fake invoice or bill is sent to a company requesting payment for goods or services - and ceo impersonation. But 77% of business leaders say they have never heard of this type of impersonation technique where fraudsters send a spoof email purporting to be from a senior representative of the company requesting a payment to a new account.

Katy Worobec, Director of FFA UK, said: 

"Fraudsters will often use spoof emails to impersonate a senior member of staff to deceive employees into transferring money. They also pose as a regular supplier to the company and make a formal request for bank account details to be changed."

FFA is encouraging business owners and employees to "Take Five" and pause and think before responding to requests to send money or change financial details.

"Many businesses haven't spoken directly to employees about how to spot and deal with scams," said Worobec. "Our message to employees is simple: listen to your instincts, if something doesn't feel right, don't feel rushed."

Take Five is a national campaign, backed by business and consumer groups, banks, the police and Government, offering advice to help businesses spot and combat fraud.

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