Member of BTG Global Advisory
Firms warned to be on their guard over fraud

Bradford firms have been urged to check their security controls following a big rise in fraud and deception by bogus customers and disgruntled employees.

Sandy Needham, chief executive of Bradford Chamber of Commerce, which represents 1,100 businesses, said it was particularly important for small firms to separate functions such as purchase orders and payments and have dual sign-off of cheques. Mrs Needham said: “In the current economic climate more firms are at risk of fraud from bogus customers or staff who may have been feeling disgruntled following a pay freeze or the loss of benefits. “For a relatively low cost, firms should ensure they have new customers who approach them out-of-the-blue credit-checked. They should also ensure that their internal systems are up to scratch to minimise internal fraud.” She was speaking following the publication of two reports highlighting the increasing threat to companies of fraud and deception by both professional criminals and hard-pressed middle managers.

According to financial investigations specialist BTG Forensic gangs of criminals are using the recession to prey on companies with ‘Hustle’ style fraud or ‘long cons’ similar to those In the BBC drama, Hustle.

Richard Pughe, BTG Forensic partner in Leeds, who specialises in fraud and criminology, said: “With companies more desperate to generate sales as the recession continues to bite, the conditions are perfect for long firm fraud and these gangs are seizing the opportunity to take advantage of the unwary. “They build a relationship over a number of months, place a few smaller orders which they pay for up front and then ask for credit for a larger order. The criminals receive the goods, sell them and vanish without making full payment.” “Among the businesses most likely to be hit are those which supply consumer goods which can be easily sold on. Businesses need to research new clients, for example, by checking records with Companies House, and also use their business acumen to avoid jumping into a deal which is too good to be true.”

The latest Global Economic Crime Survey by accountants PricewaterhouseCoopers said accounting fraud is the fastest growing economic crime experienced by organisations in the UK.

It said 47 per cent of all economic crimes in the UK were perpetrated by middle managers, struggling to maintain expensive lifestyles.

Julie Palmer

About the author

Julie Palmer

Regional Managing Partner

Meet our Team of Experts

Julie is a law graduate who qualified with Price Waterhouse in 1994. Julie joined Smith & Williamson in 1997 and became a partner in 2001. With Mike Stevenson, Julie set up Middleton Partners offices in Salisbury and Southampton, both of which are now part of Begbies Traynor.

Julie is a member of the Insolvency Practitioners Association and the None Administrative Receivers Association and is a Fellow of The Association of Business Recovery Professionals. Julie deals with all aspects of Corporate Recovery and turnaround work and takes all form of personal insolvency appointments.

Advice You Can Trust

Insolvency Practitioners Association Institute of Chartered Accountants in England and Wales R3: Association of Business Recovery Professionals ICAEW Business Advice Service Turnaround Management Association ACCA (the Association of Chartered Certified Accountants) ICAS | The Institute of Chartered Accountants of Scotland
Menu