Northern firms falling foul of confidence fraudsters, says EY Director

Companies in the North West and Yorkshire are increasingly being targeted by ‘confidence fraudsters’ who have been posing as suppliers and requesting changes to payment bank account details to divert funds to fraudulent accounts, according to EY’s Northern Fraud Investigation & Dispute Services team.

Victoria Spencer, a Director in the practice, said the firm has seen an uptick in approaches from clients seeking assistance in investigating instances of potential frauds over the last six months.

This includes a number of suspected cases in which fraudsters have impersonated a company director, CEO, CFO or similar, and instructed a member of the same company’s finance department to transfer funds relating to a ‘sensitive’ transaction, confidential urgent property transaction or company acquisition to a fraudulent account.

In other cases fraudsters have impersonated a supplier and instructed a member of the company’s finance department to change payment bank account details to a fraudulent account.

While the details needed to commit this type of fraud can be obtained via intercepted post or email communication, Spencer believes that the high volume of cases is often driven by the amount of information available about businesses online.

“This type of opportunistic fraud, which tries to trick finance employees into sending funds to third party accounts, appears to be on the increase in the North West and Yorkshire,” said Victoria.

“In many of the cases we’ve investigated, there has been a lot of information about the targeted company online.

“Details of major projects under consideration, background information about key personnel and even digital signatures often provide the tools perpetrators need to effectively pose as a senior individual within a company or a supplier.”

She added: “Businesses in the North need to ensure those with authority to change payment details are vigilant to this type of scam, and look at their processes for payments and invoicing. For example, changes to account details should only ever be made via established, approved individuals at the supplier and company.

“Any such changes should also be confirmed through two different channels of communication, such as email and phone, and all changes should be followed-up once the payment has gone through.

“Directors in the North West and Yorkshire should also consider whether the benefits of putting certain company details on the internet outweigh the threat of fraudsters using them against the business,” she said.

Victoria Spencer
Victoria Spencer

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