Scammers are preying on the communication cracks that appear when people work from home, says accountants BDO.
A few weeks ago, one of your European supply partners started calling about a new order. You hadn’t dealt with them before, but they’ve called a couple of times since. They mentioned they’d spoken to your head of procurement and they seemed up to speed about what’s happening in the business so you had no reason to suspect they were anyone other than who they said they were. You’ve got on rather well actually.
So when they ask you to make a bank transfer, you did it.
It was only later you realised they weren’t a supply partner at all.
If all this sounds just a little too far-fetched, even in the advanced world of scams, think again. New research of 500 mid-sized UK companies by accountancy firm BDO has revealed that 78% believe their exposure to crime has increased since remote working became commonplace. Almost nine in ten said they experienced fraud last year, with losses averaging out at £219,000 per company. More than 25% said they had fallen victim twice or more.
Rise of the social engineering scam
For some time, the prime threat from fraudsters came in the form of HMRC scams. As this report from 2021 notes, it was the country’s most copied brand. It still is, but there’s a new type of scam that’s preying on the cracks exposed by home working.
As The Telegraph reports, the new approach is a social engineering scam which relies on the fact that people are more remote from their colleagues than they once were. In the above scenario, for example, if you were sat in an office next to a colleague, you might be far more likely to run a quick verification check.
“Have you heard of this guy?” you might ask the person next to you. You might even double check with the Head of Procurement namechecked by the fraudster, which would quickly reveal they’d done nothing more than five minutes research about you on LinkedIn and the company website.
BDO says that isn’t happening. We’re not seeing the red flags (and we’re certainly not acting on them) because we are more remote from our colleagues. Four fifths of bosses blame hybrid working for the increase.
Collusion a major factor
Just to compound worries for business, BDO found the largest share of frauds (35%) were committed with insider help. Kaley Crossthwaite, BDO’s head of fraud, told the Telegraph this was an inevitability in the current climate:
“Based on what we’ve experienced before, in times of financial distress such as after 2008, there’s often a time lag between the start of financial difficulties and the increase in fraud, but it’s definitely cyclical,” she said.
“It’s definitely linked to hard times, so you would expect to see that as times get tough, fraud goes up. There’s definitely a correlation between the two.”
To date, however, most of the fraud advice for companies has been directed toward staff and addressing the risk of productivity or payroll fraud. This reports suggests there’s a clear need to expand that vigilance, and ensure all staff receive guidance on spotting and acting on a new generation of red flags.
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