By Liesel Annible, forensic director, Armstrong Watson LLP
The threat of authorised push payment fraud (APP) is growing and businesses were given a stark reminder when it was recently revealed Kent Brushes – a long-established business and hairbrush supplier to the Royal Family – lost £1.6m in a matter of minutes.
What is Authorised Push Payment Fraud (APP)?
APP relates to any fraud where a bank customer is scammed into making a transfer by instant payment and the funds have gone before the customer can stop it.
In the Kent Brushes case, the fraudster convinced the financial controller that the company’s funds were at risk and was given access to the bank account.
To date, none of the funds have been recovered or the fraudster identified.
It is startling to note in 2021 the UK lost £583 million to APP scams. In many instances, it may take months to get any money back from the banks – if you ever get any – and there are few instances where the fraudsters get caught.
How could APP fraud impact your business?
For the business, management and employees, the impact of APP will almost certainly be considerable stress and disruption as you try to recover the funds from the banks involved, but we’ve seen examples where it could also involve, employees not being paid, suppliers demanding payment, significant legal costs (to persuade the banks and the regulators to reimburse the business) and in some instances, insolvency.
How can you protect your business from APP fraud?
To ensure your business is not caught out by APP fraud, it is important to review your procurement policies and procedures to ensure all staff have the tools to prevent the business falling victim to this or other types of scam.
You can take the following steps to protect your business:
- Ensure staff know that a genuine bank employee would never ask for a password and or internet banking login details.
- If the fraudster is purporting to be from a supplier and advising that their bank details have changed, call the supplier to check via a number you know is associated with the supplier and ideally with a known senior member of staff
- Train staff how to identify a fake email address and ensure they check the email address is the one you have on file.
- ·Keep a record of the contact details and a key contact name who your staff can speak to if they are being asked to make changes to the supplier details on your system.
If you would like a review of your existing policies and procedures to develop robust anti-fraud measures please get in touch.
Call 0808 144 5575 or email [email protected]
