InCredit

Research by Symantec found that overall cyber attacks increased by 42 per cent in 2012, when compared to a year earlier. Criminals are increasingly targeting small businesses, with 250 employees or less.

The largest growth area for targeted attacks in terms of business size was SMEs. In 2012 small businesses made up 31 per cent of detected target attacks, up from 18 per cent when compared to 2011.

The report said, "While is can be argued that the rewards of attacking a small business are less than what an be gained from a large enterprise, this is more than compensated by the fact that many small companies are typically less careful in their cyber defences."

Whilst a cyber attack isn't necessarily related to fraud the information criminals can gain can leave a business at risk. The amount of fraud being committed online is also increasing.

Graydon offers a number of solutions aimed at preventing fraud and protecting businesses. XSeption's, signs of unusual corporate activity that could be fraudulent, are included in Graydon's credit reports. These alerts enable businesses to identify potential risks.

In addition Graydon offers Intelligence Networks for some industries. The Graydon Intelligence Service includes the following industries: petroleum, steel, timber, communications suppliers, IT distributors, IT resellers and hotels. The networks allow businesses to meet with industry competitors and discuss risks and be forewarned.

Speaking to ARN, Peter Sparkers, Symantec APJ managed security services director, said, "There is still a perception that most of these targeted attacks from cybercriminals are on the big end of town, such as large financial organisations. But this shows that the targets these days are small businesses as well."

The report also found that the most attacked industry was manufacturing, which accounted for 24 per cent of attacks. This was followed by finance, insurance & real estate (19 per cent).

Symantec's report supports the research found in Graydon's white paper 'Commercial Fraud: Managing the risk'. However data from this research showed that wholesale and retail traders were estimated to lose the most money, £16.1 billion in 2012 in the UK alone.  Manufacturing (£7.4 billion) and financial & insurance activities (£3.5 billion) followed.

The figures emphasise how important it is to be aware of how vulnerable a business as due to the sector it operates in or its geographical location.  For more information on the issues and how to protect a business download the white paper.

Symantec's recommendations for avoiding cyber attacks:

• Assume you're a target- Targeted attacks threaten small companies as well as large ones as a result small size and relative anonymity are not defences.
• Defence in depth- Emphasize multiple, and mutually supportive defensive systems to guard against single-point failures in any specific technology or protection method
• Educate employees- Raise employees' awareness of the risks and counter it with staff training.
• Data loss protection- Prevent data loss on your network and use encryption to protect data in transit, whether online or via removable storage.

Last year saw more frauds recorded by CIFAS, the UK's Fraud Prevention Service, than in any previous year. CIFAS members reported nearly a quarter of a million fraud cases during 2012, representing a five per cent increase when compared to 2011.

The organisation's report highlights the need for UK businesses to safeguard against the growing crime. Richard Hurley, CIFAS Communications Manager, noted that a wide range of factors affected fraud including, the economic situation, changing business practices and the rapid development of digital technologies.

Despite the amount of fraud detected increasing, it is likely that the problem is much larger than figures suggest.

CIFAS said, "The stark reality is that much of fraud simply evades detection, as when applications do not meet an organisation's lending criteria, they often do not get passed on to their fraud department.

"This means that the levels of fraud detected was potentially only the tip of the iceberg, which does not bode well for coming years."

Two types of fraud increased over 2012, identity fraud and facility takeover fraud, and both pose a threat to businesses.

Identity fraud

Identity related crimes account for nearly two-thirds (65 per cent) of all fraud confirmed in the UK and the amount detected rose by 9.1 per cent in 2012.

Identity fraud involves using another's name to make applications for goods or services and/or concocting an entirely fictitious identity. Businesses that have become a victim of identity fraud are often unaware until a supplier demands payment for goods or services that haven't been ordered or they begin to chase a fake customer for payment.

The increase in this type of fraud has been linked to the fact that the lending picture is looking a little more optimistic. CIFAS's analysis shows that identity fraud levels plummeted when the credit crunch hit.

The popularisation of easily accessible loans, such as peer-to-peer lending, has also led to an increase in identity fraud. This is largely because they are often offered by new entrants to the market and are a target for fraudsters.

Businesses that operate online are also more vulnerable- over 80 per cent of identity fraud occurs on the internet. The report said, "The continuing move to online business has also benefitted the fraudster. As more business is carried out online, so more identity fraud occurs online."

Becoming a victim of identity fraud can place unnecessary pressure on a business by ruining their credit rating, reputation and cash flow.

Facility takeover fraud

The number of facility takeover frauds recorded in 2012 soared by 53.3 per cent in 2012, when compared to 2011.

The takeover of an account differs from identity fraud mainly due to the fact that the account is already in existence and so no 'impersonation' is required. CIFAS likens account takeover akin to stealing someone's keys in order to enter their house rather than impersonation.

The research found evidence that fraudsters are taking over accounts and, instead of taking receipt for the goods and then selling them, are choosing not to take the delivery. They then try to have the value of the goods refunded to a card account that they already have control of.

CIFAS added that there was a 'notable increase' in cases where the hijacker attempted to change the address of the account.

Becoming a victim of this type of fraud poses a significant risk for businesses, as it may be some time before they notice the deception.

What can businesses do to mitigate fraud?

There are a number of steps businesses can take to reduce the risk of fraud. Firstly, businesses should ensure they know the identity of their customer before entering into an agreement.

Subjecting all potential business partners to a credit report will highlight anomalies and previous issues. Similarly double checking credit references may raise queries that went unnoticed at first glance.

Remaining alert and being aware of behaviour that may indicate fraud is vital. For instances, sudden changes to the delivery address or last minute order changes should set alarm bells ringing.

Working closely with other businesses to share information and discuss best practice in regards to fraud is also beneficial. Being part of a closed sector specific group allows you to remain up to date with potential issues and weaknesses.

Graydon's credit reports include Xseptions, signs of unusual corporate activity that could be fraudulent, giving clients an additional layer of protection. Graydon's white paper 'Commercial Fraud: Managing the Risk' offers insight and advice on the topic.

The amount of accounts taken over by fraudsters surged by 53 per cent in 2012, when compared to the previous year. The figure raises some serious concerns about how businesses are protecting themselves.

Analysis of fraud trends by CIFAS, the UK's Fraud Prevention Service, found that plastic card accounts were the most commonly hijacked product, increasing 44 per cent when compared to 2011 levels.

In addition, attempts to take over the running of a bank account also increased by 48 per cent, over the same period.

Richard Hurley, CIFAS Communications Manager, commented, "The fraudster's aim is simple: financial gain. This explains the particular increases in the attempts to take over these types of account in particular: the potential for immediate gain is critical for fraudsters and, of course, the immediate impact on the victims of such frauds is also damaging."

Mr Hurley added that with this in mind organisations must seriously and fundamentally start to review the security processes used. "These increases clearly demonstrate that fraudsters have become more successful and determined than ever," he concluded.

Fraud is often seen as a problem for individuals not businesses, yet when the National Fraud Agency quizzed SMEs 25 per cent stated they had experienced fraud within the last twelve months.

Commercial fraud is greatly varied and can range from simple to highly complex. For example fraudsters can send fake invoices and requests for payments for goods that haven't been received. In other cases fraudsters have stolen a company's details to commit fraud, such as opening bank accounts or ordering goods in the company's name.

Some sectors are more vulnerable to fraud including retail, manufacturing and construction. Businesses operating in these sectors need to ensure they have robust procedures in place in order to mitigate fraud.

Businesses can take steps in order to reduce the risk fraudsters present. Ensuring that a business knows the identity of a customer is crucial before entering into an agreement. Looking over a potential clients credit report and checking references is the first step to preventing the crime.

Graydon includes Xsceptions, signs of unusual corporate activity that may be fraudulent, in credit reports giving businesses additional information and protection.

Businesses can learn more about fraud and how to protect themselves in Graydon's white paper 'Commercial Fraud: Managing the risk'.

IT has been the top hiring sector of 2012, creating over one million job vacancies, according to job website Adzuna. Both technology and engineering companies are expected to do well in 2013.

The study analysed a comprehensive search index of over 500,000 jobs and gives an indication of which sectors are feeling confident enough to hire additional staff.

The outlook for the coming year also looks positive. Andrew Hunter, co-founder of Adzuna, said, "We expect unemployment to continue to fall in 2013 with technology and engineering sectors performing the strongest in the first half of the year."

Both the engineering and energy/oil sectors are expected to perform well in 2013, with the number of jobs advertised projected to increase by five per cent in Q1. Those in manufacturing in the East Midlands are also predicted to increase levels of staff by ten per cent, if the pattern from Q4 continues.

However regions heavily dependant on the public sector such as Northern Ireland and Scotland are likely to suffer.

Many IT businesses have seen an increase in opportunities over the last few years, linked to the rise of smartphone apps, tablets, online shopping and other technological advances.

Before entering into agreement businesses should ensure they know their customer by looking at credit reports, trade history and obtaining references. Taking these simple steps enables a business to avoid late payments, bad debt and fraud.

Few acronyms are as apt as LIBOR, pronounced LIE-BORE. Repeated banker's lies are a bore to every honest citizen. Let's remind ourselves how critics assert they got this unenviable reputation? Through a coiling miasma of mis-selling, that's how. They mis-sold mortgages and helped to fuel a global recession. They mis-sold PPI and continue to pay the price. They mis-sold interest rate swapping and the recriminations are just beginning.

Libor is one of the bedrocks of our financial system: residential mortgages, company loans, deposits, inter-bank borrowing, and derivatives are all based on it. On 16th March our blog 'Definition of an SME: Small, Medium and Excluded' implored business secretary Vince Cable to use his political clout to get the banks to help SMEs. Libor appears to have strengthened his resolve to do so; or at least it has increased his rhetoric.

Cable told the BBC's Andrew Marr show (08/07/2012): "The banking culture is anti-business; it doesn't focus on the long-term. It is throttling the recovery of British industry because companies cannot get loans to expand their business." Hallelujah and thank you Mr Cable! And, the opposition is getting in on the act too, with Ed Miliband calling for 'more competition' and Ed Balls wanting 'root and branch' reform.

Meanwhile, SMEs wait for the money. It's not just the banks that have short arms and long pockets. As suppliers, SMEs too often find themselves waiting to get paid. Big businesses are all too often the culprits, as John Walker, national chairman of the FSB can testify with 75% of his members experiencing late payment. Once again we can look to the Government to improve the situation, this time with the Prompt Payment Code. To date, 25 of the FTSE 100 companies have signed the code, a voluntary undertaking to pay suppliers on time.

The code once again unites political parties with Labour MP Debbie Abrahams saying: "In the current climate I cannot imagine why a multi-million pound company with a healthy balance sheet would not be prepared to lead by example and sign up for the code." Phil Orford, chief executive of the Knutsford-based Forum of Private Business agrees: "The code asks nothing more from responsible businesses than to pay suppliers as and when agreed, without changing terms and conditions retrospectively."

Libor has over-stepped the mark; an action that demands a reaction. If its aftermath should trigger better access to finance and improve the flow of credit, then it will leave a positive legacy few could have imagined. Not least among SMEs who hold the key to growth and prosperity.

(ct) 

Fraud in the UK reached a record high in 2011. The KPMG Fraud Barometer revealed that fraud totalled £3.5 billion in 2011, an increase of 150 per cent on the previous year, but the majority of that was in the second half of the year http://bit.ly/xmv8Yi

Scams committed by those in management positions increased by 74 per cent, accounting for 57 cases and a value of £729 million. The most fraud was carried out in the public sector and at financial firms.

When it comes to trade, SMEs as well as large corporates are equally vulnerable. Graydon UK has identified a number of steps that businesses can take to protect themselves against the threat of corporate fraud:

•           Always obtain a credit report for customers and suppliers that does not simply regurgitate Companies House data but one that tracks and analyses unusual patterns of corporate behaviour in order to identify potential fraud

•           Never set up a client account until their application has been fully processed

•           Always check clients' trading and registered office addresses

•           Be wary of mobile phone numbers and non business e-mail addresses such as hotmail or yahoo

•           Check whether your customers have a website when establishing their identity

•           Most companies will pay their bills by completing a purchase order from their accounts department - make sure that you obtain a copy of this before sending an invoice

•           When dealing with non incorporated businesses, always request original copies of utility bills quoting the delivery address

•           Double check all delivery addresses, keeping a close eye on what sounds like residential addresses

•           Check whether clients are VAT registered by calling the VAT Office for confirmation

It is also extremely important to flag certain events and details that seem out of the ordinary. Here are some examples of incidents which should alert firms to the possibility of fraudulent activity taking place:

•           Is a sudden change of delivery address provided to you by the client?

•           Is there a last minute call to collect the goods rather than have them despatched to the quoted delivery address?

•           Is the delivery address given by the client shown on the credit report you obtained from your agency?

•           Are the telephone numbers of the business you are dealing with fixed line or non geographic such as 0800 numbers?

•           Have you received an order on the last afternoon of the month? Fraudsters, like credit managers, understand the pressure from the Sales Department!

•           Look out for unusually large orders placed at the start of a new month, where a fraudster will anticipate that they have the longest timeframe before you chase for payment.

•           Have you received a large first time order on a credit card? If so, be wary.

WELL, its taken a fair bit of time, but hooray, crime fighting bodies in the UK seem to have finally woken up to the growing threat of fraud which now costs this country a staggering £38bn a year!

Despite the scale of this menace, police and other authorities showed very little interest in tackling this particular type of crime in recent years; up until recently that is. Whilst it would still be true to say that the police are still not interested in investigating completed frauds, moves are certainly being made to ramp up activities on prevention.

At a Fraud forum organised by Graydon in April, a police inspector from the recently established National Fraud Intelligence Bureau, told delegates that information gathering was key to fighting and preventing fraud in the future. Many organisations were being encouraged to sign up to delivering fraud data into the centralised computer at the NFIB, including big banks and the non profit making CIFAS. Once there, data can be more easily analysed by the police to identify "hot spots" (addresses commonly used by fraudsters), and connections between individuals and gangs.

On the 5th May, the Daily Telegraph reported that the charity Crimestoppers has also turned its attention to fraud for the first time in its 23-year history. Apparently, only 5% of the 80,000 crimes reported to Crimestoppers relate to fraud, but since the organisation added a fraud section on its website, traffic has actually doubled.

For far too long, criminals have been attracted to fraud because the risks of being caught have been perceived as lower than many other crimes. Maybe, the heightened profile of all this enthusiastic fraud prevention and data sharing will serve as a greater deterrent. Even if conviction rates don't rise sharply as a result, fraudsters might find it more difficult to perpetrate their crimes against a better informed and more wary population.