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Businesses Beware:
It’s Not Just Individuals Losing Out To APP Fraud!

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Small businesses lost over £42.6 million to online scams in the first half of 2023.

Sad upset woman pensive with phone in hands working inside office at workplace, businesswoman financier received notification message with bad news online, uses app on smartphone.

Small and medium-sized enterprises (SMEs) found themselves impacted heavily by scams and fraud in the first half of 2023, according to UK Finance, the trade association for the banking and financial services sector.

Over £42.6 million was lost by UK businesses to Authorised Push Payment (APP) fraud, where scammers convince victims to transfer money from their (or their business’s) bank account into another account for what they believe to be legitimate reasons. People often associate this sort of scam with individuals, but scammers are not fussy about who they target, and businesses are not immune to fraud and can sometimes be very lucrative to fraudsters.

In order to raise awareness of how easy it can be for businesses to fall victim to fraud, especially in a busy office environment, the Take Five to Stop Fraud campaign has developed an interactive quiz and released the first batch of data from respondents. The results showed that nearly a fifth of those who took part could not always spot a scam.

UK Finance’s national Take Five to Stop Fraud campaign aims to raise awareness and encourage consumers and businesses to be vigilant about potential scams and fraud by familiarising themselves with red flags and warning signs.

The ‘Can You Spot Fraud’ quiz was designed for small business owners to replicate the conditions of a busy office environment with constantly pinging emails, phone calls and requests from various sources while also slipping in a number of well-disguised scam attempts amongst genuine communications.

Over 7,000 have taken the quiz since it was launched, and 17% of respondents could not always spot a scam when it was attempted.

Businesses of all sizes are attractive targets to scammers as their accounts usually hold more money than that of an individual consumer, and so the criminals’ prize pot is potentially much larger. As demonstrated in the UK Finance quiz, business owners and employees are also prone to more day to day distractions and pressures than individuals, which may make them less likely to pick up on warning signs that a request for an urgent transfer may not, in fact, be what it seems.

Scammers’ tactics for targeting businesses are much the same as those used to target individuals, so business owners must keep themselves and their colleagues aware of red flags and warning signs. Some common APP scams that businesses typically face include:

  • Impersonation scams – when the scammer pretends to be or work for an organisation known to the business, e.g. accountant, utility provider, client, supplier, HMRC, etc. and convinces the business owner to transfer funds.
  • Fake invoice and payment requests – like an impersonation scam, the scammer will send an invoice purporting to be from a new or existing company supplier, hoping that the accounts department will not double-check the details and will willingly make the payment.
  • Interception scams – the scammer intercepts communications from the business to for example a supplier or contractor, which the business plans to pay, and advises that the receiving bank account details have changed, diverting the funds into the scammer’s account.

To keep you and your business safe from fraud, it is always best to take time to verify any requests for money, even if you believe them to be genuine or it looks like just another routine payment. Some steps businesses and individuals can take include:

  • Double-check any bank or contact details with the real firm or person in question. Fraudsters can make a phone number or email address appear genuine.
  • Be wary of filling in online forms that ask for personal or business details or to make a payment.
  • Never give anyone remote access to your computer, especially if they have called you unexpectedly.
  • Be wary of banks asking you to move money to a ‘safe account’ – banking institutions never use these, and you should never be asked to transfer your money into one.

Authorised Push Payment (APP) scams are a type of cybercrime that has seen an unfortunate rise recently. Scammers use social engineering techniques to manipulate unsuspecting individuals into transferring, sometimes substantial, funds to accounts that the scammers control.

In most cases, once the victim has transferred funds to the fraudster, the money is swiftly moved on, often overseas or into cryptocurrency and becomes virtually impossible to recover.

  1. If you are a business owner or individual who has been the victim of an APP fraud scam, you should follow these steps:
  2. Report the scam to the police and Action Fraud, the National Fraud and Cyber Crime Reporting Centre.
    Report the scam to your bank.
  3. If your bank refuses to provide a refund, and you believe there is more it could have done to prevent the scam from happening, a complaint can be made to the Financial Ombudsman Service.

UK banks have a duty of care to prevent, spot, and stop scams like this as they happen. The Government-backed Financial Ombudsman Service (FOS) investigates complaints between financial institutions and their customers and has the power to award compensation if it finds that the banks have have failed in these responsibilities.

Head of the Scams and Fraud department and Legal Director at TLW Solicitors, Sarah Spruce, commented:

“Scammers target small businesses because they generally hold more money in their accounts and, with multiple employees sometimes involved, people going on holiday, and generally being under day to day work pressures, discrepancies are not always detected immediately.

The best defence against your business being scammed is making sure that you and your workforce know how to spot the red flags of a scam, much as they probably would with their own accounts, and that they are empowered to stop payments if they think something isn’t right.

However, if it is too late, and your business has lost money to a scammer, and your bank refuses to compensate, contact my team who will look into your case and work with you to secure any compensation the business may be owed.”

If you are an individual or a business owner or manager who has been the victim of a scam, the specialist Authorised Push Payment (APP) Fraud team at TLW Solicitors can help you make a compensation claim to recover your losses. We understand the processes involved and the time limits to be followed. We have robust case management systems, meaning that we keep progressing your case and will keep you fully up to date.

We work on a ‘no-win, no-fee’ basis; if your case is unsuccessful, we will not charge for the time we have spent.

If you or your business has been conned into making payments to fraudsters, please get in touch for a confidential, no-obligation discussion.

You can call us at 0800 169 5925, email info@tlwsolicitors.co.uk, or complete one of the online forms below.

It is important to get advice as soon as possible, as strict time limits can apply.

Minimum case values may apply.

Meet Our Team

Meet Sarah, who heads up our experienced Authorised Push Payment Fraud Claims team.

Sarah and her colleagues are on hand to help with your claim.