Business Fraud
Prevent
Detect
Act
DC Stephen Crooks
OCB Financial Crime Unit
FRAUD RISKS
Staff Fraud:
 Employment application fraud
 Unlawful obtaining/disclosure of personal data
 Unlawful obtaining/disclosure of commercial data
 Account fraud
By abusing position – identifying weaknesses or
opportunity to commit fraud
Click here to download a copy of Staff Fraudscape. An interactive contents page will
help you to pinpoint sections of particular interest.
FRAUD RISKS
Mandate fraud
Long/Short Firm fraud
Card Not Present (CNP) fraud
Fraudsters hijacking your website to redirect
orders to their server
 Scams and Phishing attacks – to get access to
the company’s banking details
 Website traffic diverted to bogus site – cloned
site e.g. near-misspelling
 Publishing/Trade Directory scams
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FRAUD RISKS
Private
Sector
Fraud
£45.5 billion
_________
Increase
from
£38.4 billion
in 2011
£30.5 billion
2009 and
£14 billion
in 2008
FRAUD FACTS – Fraud Advisory Panel
www.fraudadvisorypanel.org
An introduction to fraud indicators
• Prevention and early detection of internal fraud are
always preferable to intervention after the event.
Once a fraud has become firmly established or
entrenched within an organisation, the financial,
legal, reputational or regulatory ramifications will be
considerably more severe. One very effective method
of prevention is the pro-active identification of fraud
indicators.
FRAUD FACTS – Fraud Advisory Panel
www.fraudadvisorypanel.org
Anti-fraud policy statements
• An anti-fraud policy establishes guidelines for
preventing, detecting and dealing with fraud. It also
sends out a clear message to staff and third parties
about conduct that will not be tolerated by an
organisation.
FRAUD FACTS – Fraud Advisory Panel
www.fraudadvisorypanel.org
Anti-fraud policy statements – sample
• The following example of an anti-fraud policy
statement should be used as a guide only. The
content of your anti-fraud policy will depend upon the
nature, size and complexity of your business.
FRAUD FACTS – Fraud Advisory Panel
www.fraudadvisorypanel.org
Pre-employment screening
• It is estimated that almost one in seven CVs contain
some form of discrepancy – most commonly dates of
employment, academic and professional
qualifications and undisclosed directorships*. Preemployment screening can help your organisation to
identify undesirable individuals, who may be
dishonest or susceptible to committing fraud, before
they join.
FRAUD FACTS – Fraud Advisory Panel
www.fraudadvisorypanel.org
Business fraud detection
• Fraud detection should form part of an organisation’s
overall anti-fraud strategy to identify and stop new or
historical fraud at the earliest opportunity. Effective
fraud detection saves money and protects
businesses and their employees, shareholders and
customers.
FRAUD FACTS – Fraud Advisory Panel
www.fraudadvisorypanel.org
An introduction to fraud investigations
• Businesses should be prepared to act immediately on
suspicions of fraud. Whether investigations are
conducted in-house or by a third party, it is important
that your organisation has a basic understanding of
the investigation process and what you can and
cannot do.
FRAUD FACTS – Fraud Advisory Panel
www.fraudadvisorypanel.org
Fraud reporting a shared responsibility
A report by the Fraud Advisory Panel
FRAUD FACTS – Fraud Advisory Panel
www.fraudadvisorypanel.org
Fraud in smaller businesses
• Small and medium-sized businesses (SMEs) are
particularly vulnerable to fraud in times of economic
downturn; many lack the controls found in larger
organisations and do not necessarily have the
resources to combat certain types of fraud. This
factsheet highlights some of the key areas of fraud
risk.
FRAUD FACTS – Fraud Advisory Panel
www.fraudadvisorypanel.org
Corporate identity fraud
• The term ‘corporate identity fraud’ is commonly used
to describe the impersonation of another company for
financial or commercial gain. Fraudsters steal your
company’s identity and/or financial information and
use it to purchase goods and services, obtain
information or access facilities in your company’s
name.
• CIFAS Protective Registration http://www.cifas.org.uk/pr
FRAUD FACTS – Fraud Advisory Panel
www.fraudadvisorypanel.org
Supplier and outsourcing fraud
• Whenever an organisation acquires goods or
services from another party, or looks to outsource an
internal function to an external organisation, there is
a risk of fraud, which potentially could result in
significant losses and reputational damage.
FRAUD FACTS – Fraud Advisory Panel
www.fraudadvisorypanel.org
Bribery and corruption
• On 1 July 2011 all of the UK’s existing law on
domestic and foreign bribery was replaced by the
Bribery Act 2010. The new framework is premised on
four key offences: bribing, being bribed, bribing a
foreign public official; and a corporate offence when a
commercial organisation has failed to prevent bribery
being carried out on its behalf by a person associated
with it. This new regime imposes serious sanctions,
financial and custodial, and businesses need to take
steps to ensure they do not fall foul of its wideranging powers.
Evidential Packages
Evidential packages should contain all relevant
information surrounding the allegations made.
Evidential packages should include as a minimum:
• A comprehensive report outlining the nature of the
allegations including values and relevant dates. The
full name address and DOB of the suspect, or
suspects
• A full description of any investigations already
undertaken.
• Copies of all relevant documents, each individually
numbered and identified in the summary.
Evidential Packages
• Names, DOB addresses and other contact details of
all witnesses identified at the time of reporting to the
police.
• Copies of all witness statements obtained (typed).
• Any police reference numbers that may already apply
to any part of the case, i.e. C&C, NICHE etc.
• A name and contact details for the officer dealing with
the case
Schedule of Witnesses
Where more than two or three witness statements are
provided, it is essential to list them on a schedule.
The Schedule should
 identify each witness
 outline, in brief, the evidence in chief each witness
will provide
 detail the Exhibits each witness will produce
It should also be noted that – UNDER NO
CIRCUMSTANCES SHOULD ORIGINAL
DOCUMENTS BE FORWARDED.