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Wednesday 1 October 2014

Crime survey shows fraudsters targeting small firms

Published 19/08/2014 | 02:30

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BOGUS EMAILS: In a recent phishing attack on Irish consumers, some people had their bank accounts cleared out
BOGUS EMAILS: In a recent phishing attack on Irish consumers, some people had their bank accounts cleared out

ALMOST one in four small businesses have been affected by credit card fraud, a new survey suggests.

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That's up from 18pc in 2013, according to a crime survey by the Irish Small and Medium Enterprises Association (ISME).

The lobby group has expressed concern as reports of business scams made to the ISME helpline increased in the last month.

ISME chief executive Mark Fielding said the level of fraud and scam attempts on SMEs is rising and owner-managers need to keep themselves informed of the methods being used.

"It has come to our attention that a number of businesses have fallen victim to social engineering scams in recent months," Mr Fielding said.

"These are scams where the information is attained from a person rather than through the computer system. An elaborate lie or impersonation is used to establish legitimacy, with Revenue or a bank as cover. The perpetrators obtain enough information, including full details of online banking passwords, to gain access to the victim company bank account, following which fraudulent high-value payments are made.

"All it takes is for one member of staff to make an innocent mistake that could end up costing their employer thousands."

Key findings from the survey include:

n 68pc of businesses have been a targeted by scams in the last year.

nSpamming is still the highest intrusion at 86pc. Three-quarters identified overseas offers, 61pc 'phishing', 58pc virus infection and 48pc dubious business directories as the culprits.

n 82pc of businesses have been the target of computer-related crime attempts.

n Credit card fraud is at 23pc, - up from 18pc last year.

n Supplier-initiated fraud occurred in 15pc of cases, while staff fraud - suffered by 6pc of enterprises - doubled from the 3pc last year.

Mr Fielding said businesses must do their utmost to minimise their risk and exposure to scams.

"Vigilance, training and repeated awareness-raising are vital. The non-financial effects of scams can also be substantial, where fraud can create an atmosphere of distrust which affects management and staff, while reputational damage affects customers," he said.

ISME urged businesses to undertake a full review of all internal control procedures, check all invoices carefully, ensure all signatories within the company are fully briefed, ensure your business has an appropriate email and internet policy for all staff and never respond to an internet request from a bank.

Meanwhile, a separate global fraud research report, which surveyed consumers in 20 countries, found that one in four consumers was a victim of card fraud in the last five years. The United Arab Emirates has the highest rate of fraud overall at 44pc, followed by China, India and the United States. Ireland, however, was not included.

Irish Independent

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