How to prevent fraud?

There are many ways that companies can protect themselves from becoming the victim of fraud. The best fraud prevention processes contain a mix of digital and manual techniques such as IDV checks, document verification, credit circles, staff training and business checks.

Welcome back to our series on fraud in the UK. So far we have looked at the scale of the fraud problem facing the UK, the methods that criminals use, and what is fraud prevention. Today we are going to look at some of the ways that you can protect your business from the actions of fraudsters.

These are a mix of specific techniques and processes as well as high level actions that will help guide your businesses anti-fraud stance.

In no particular order, here are some of the best ways that you can prevent fraud.

Build a multi-layered fraud prevention system

This should be a guiding theory when designing your processes. The reason being that with each additional check and processes it becomes more difficult for a fraudster to slip through your net, especially when it comes to digital checks. A particularly sophisticated and well resourced fraudster may use a fake ID to fool an IDV check but by adding a document verification check they would be unable to pass through your defences.

Train your staff

Most people still assume that fraud is something that happens to other people and that they would be able to spot a scheme without much difficulty. By training your staff in the extent of the problem, things to be vigilant for, and the importance of following your fraud prevention processes you are taking a significant early step to making your company fraud-safe.

Digital IDV & digital document verification checks

These are two of the most powerful methods of catching fraudsters. A digital identity verification check has the person taking the check photograph their ID and their face (for even more security Red Flag Alert IDV checks include a liveness check) and scan for hundreds of datapoints to confirm they are the same individual. A digital document verification check then scans the ID document to confirm its authenticity.

Together, they ensure that your client is exactly who they say they are.

Mobile phone checks

These checks allow you to see if your prospective client’s number or handset show suspicious activity suggestive of illegality. They will check the phone number to see who it is registered to and how long it has been active. They are also capable of informing you about the handset itself; telling you if it is a burner phone, how long the SIM card has been in it, if it has multiple SIMs in, and how many different SIMs it has had in it and when they were so.

Fraudsters generally swap out there numbers often or use burner phones in order to evade those they have defrauded.

Business checks

These check your prospects business to confirm it operates as expected. Due to the ease with which shell companies can be set up in the UK, fraudsters have no difficulty in setting up businesses that will pass a cursory Companies House search.

Business credit checks are able to tell you how long a business has been active for, if it appears to operate as normal, who it is linked to, and if its filings have been cloned from another business.

Bank account checks

Anyone trying to steal money directly will have to give you a bank account. Running its details through a bank account check shows you how long the account has been active for, who it is linked to, what type of account it is, and if it shows suspicious activity.

Check their business address

Thanks to internet services like Google Street View, it is extremely easy to check the addresses your prospects are purporting to be their business premises quickly and easily. You should look out for things such as if it seems like a premises suited to their type of business, does it have their sign on, and if it is in use.

For particularly large sales or if you are unsure, you can have a member of staff physically attend the premises.

Join a credit circle

As businesspeople we don’t like to talk about fraud and we certainly try to avoid sharing information about our business dealings with potential competitors. Unfortunately, this ethos of playing our cards close to our chest provides the most fertile soil for fraudsters to operate in.

A credit circle is a group of businesspeople who regularly come together to share information around those they have dealt with that are or have been a credit risk or flagrantly dishonest.

As fraudsters tend to target as many companies in one area with their scams as possible it is likely that if a similar business to yours has been targeted then the same criminal will eventually approach yours.

These circles also give you an additional resource for your fraud prevention processes as you can contact its other members to check if they have had dealings with a prospect and if they are trustworthy.

There are many other ways that you are able to combat fraud but by enacting just some of these listed you will have taken a great stride to making your company fraud-safe.