Beating the business cheats

February is scam awareness month, a campaign launched by the Office of Fair Trading (OFT) to raise the public consciousness on the issues of fraud and con artists.

From pyramid schemes and fake lottery wins to the now legendary Nigerian banking scams there is no shortage of fraudsters ready and willing to swindle small businesses out of their hard earned cash.

The OFT estimates that unscrupulous criminals using low-cost, mass-marketing techniques to target recipients trick UK consumers out of £1 billion a year, and has identified the Top ten scams to help raise awareness.

The Federation of Small Businesses (FSB) is lending its voice to the cause, calling on the Government to change legislation to give businesses more protection.

Currently, the OFT can serve so-called Stop Now Orders on con artists perpetrating scams on consumers. However, a clause in the 2002 Enterprise Act excludes small businesses and the self-employed from such protection. The FSB wants the Stop Now Orders to be extended to include them.

“Fraudsters are increasingly aware that small business owners must run their firm and also comply with ever-increasing regulations and red tape,” said FSB Trade and Industry Chairman Tina Sommer. “We are calling on the Government to extend its definition of consumer to include small firms and for the OFT to use all the powers at its disposal to protect small businesses.”

Accountant and business adviser PKF has also warned that small businesses cannot even trust their own employees. It has identified four basic types of fraudster to look out for:

  • The Loner works excessive hours and is very protective of their own work, perhaps because they are making calls or accessing files when nobody else is around.
  • The Manipulator exercises control over schedules and deadlines and plays staff off against each other to hide their wrongdoings.
  • The Deceiver is a long-serving, trusted employee who knows how the system works and how to exploit it. Often passes the buck and avoids answering difficult questions.
  • The Boaster shows off expensive clothes, holidays or cars, which he or she has purchased with their ill-gotten gains

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