- KPMG warns businesses to be extra vigilant over the festive season to avoid being scammed by bogus suppliers.
With professional criminals accounting for 74% of fraud against commercial business during the first half of 2011 (£47.8million out of £64.2million) according to KPMG’s Fraud Barometer, the firm advises extra vigilance and pre-emptive measures over Christmas and the New Year as skeleton staff levels can leave companies exposed to organised criminals.
As businesses look to cover staff absence, many finance departments may be left with limited cover and employees in charge of payments who may not normally do so. This is a prime target for organised criminals posing as suppliers and advertisers. The callers seek to extract information which is then used to swindle significant funds as they demand payment in order to close out books at the end of the year.
The two most common scams are as follows:
- Callers claim to be from known suppliers and seek to extract supplier related information from accounts staff. These details are then used in a subsequent letter advising changes to bank details
- Bogus advertising and publications: companies receive an invoice for sponsorship of a ‘good cause’ publication referring to a previous call and acceptance made to advertise.
To help protect businesses and charities from becoming victims to these types of fraud, KPMG is calling on organisations to take these preventative measures and brief holiday cover staff to:
- Ensure they ask for full details of callers – which in itself will often act as a deterrent;
- Not supply data unless the caller is identified as genuine;
- Rebuff any form of intimidation or threatening behaviour;
- Web search and check out entities / individuals asking for sponsorship or advertising;
Over the longer-term ,employers can also raise awareness of such scams and provide training for their staff on how they should handle such callers.
Alex Plavsic, Head of Fraud Services at KPMG Forensic, said:
“Fraud should always be high on the agenda but at this time of year, even more so. With often skeleton staff in charge, companies need to make sure that they have proper handover processes in place so that people know what to do when a supplier calls. But more importantly, that they never agree to anything over a single phone call.”
“These are not new scams, but the growing trend shows they are working and proliferating. Organised crime aims its focus on the weakest link and exploits the trusting nature of employees who may be inexperienced or poorly supervised, especially over the festive season.”
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For further information please contact:
Mike Petrook, KPMG Press Office
020 7311 5271 (t), 07917 384 576 (m) or email@example.com
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.