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Fraud costing SMEs £4bn

Fraud is hitting the UK’s small businesses to the tune of £4bn per year, according to the National Fraud Authority.

One in four small businesses were the victims of fraud last year, with the costs estimated at £4bn in detectable fraud. The annual fraud indicator, published by the National Fraud Authority, calculated loses to all UK businesses to be £5.7bn.

The report found that half of this fraud is insider-enabled fraud i.e. committed by members of staff and business partners. According to the Chartered Institute of Management Accountants, fraud most often occurs through a combination of motivation, opportunity and rationalisation.

Research by identity checking website has polled the public anonymously to find out how honest or not they have been in the past. 

The findings are startling: one in ten people have faked their address in the past, 18 per cent have lied about their age and 28 per cent have not been truthful about their salary or debts. More worryingly, one in ten are prepared to lie in order to make money.

Wendy Shand, founder of holiday business Tots to Travel, believes taking measures to counter fraud are essential for any small business.

“Employing the right staff, contracting the best suppliers and attracting expert business partners are the cornerstones to the success of a small business like ours,” she says. 

“Getting this wrong can prove very costly to the company, so carrying out background checks is important what you don’t know can hurt you. Although pre-employment checks can’t stop people from doing wrong, as small business owners we’re keen to embrace any measures which can help to mitigate risks.”

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