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19 Oct 2020

One of the most common types of fraud that any business owner can fall victim to is identity fraud.

With the potential to cause significant losses, this fraud type occurs when a business identity is stolen and is used to accumulate debts or to open lines of credit. And, as identity fraud is typically linked to an individual as opposed to a company, few businesses are able to obtain insurance to protect them from business fraud. Sadly, while this is the most common type of business fraud, it is not the only one.

If you are starting a new business or have run a company for years, it is important to learn as much as possible about business fraud and to be aware of how you can prevent it from occurring. Remember, falling victim to business fraud can have both short and long term repercussions for your finances, and can even cause tax disputes over earnings.

At ABV Solicitors, our fraud solicitors can help you to identify any weak spots in your businesses security system and help you prevent falling victim to external or internal business fraud. If you have already been victimised by business fraud, then our team will assist you in reclaiming potentially lost assets and bringing your case to court. What more could you want for your business?

But what are some of the other types of business fraud that you may fall victim to? Our fraud solicitors have the answers.

Payroll fraud

If you run a smaller business, you are at a higher risk of payroll fraud. Defined simply, this type of fraud occurs when employees ask for an advance on their wages or fill in timesheets stating that they have worked more hours than they actually have. To prevent this, our fraud solicitors recommend conducting thorough background checks on all of your employees and setting up a suitable payroll account, to help you detect these issues early on.

Returns fraud

If you sell goods, you may fall victim to returns fraud. There are 2 types of returns fraud – the returning of goods which have no flaw and the return of goods to your store which has been stolen in exchange for cash or credit. Many shops already practice a returns policy based around receipts, but you may want to offer returns within a set time frame with a loss of credit if it is exceeded.

Financial fraud

Becoming less common due to the use of contactless cards and plastic-based bank notes, financial or money fraud occurs when a proprietor is given fraudulent banknotes by customers.

Luckily, there are ways to identify fraudulent notes with colour shifting inks, certain lights and even watermarks; all of which can be easily taught to your storefront employees.

Workers compensation fraud

Fraudulent injury or illness claims cost employers a great deal of money each year. To ensure that your employees are kept safe on your premises, install CCTV cameras and insist on a doctor’s note in relation to extended sick leave.