Mandate Fraud

Mandate Fraud

Mandate fraud takes place when you or an employee is deceived into changing a regular payment mandate (such as a direct debit, standing order or bank transfer), by purporting to be an organisation you make regular payments to such as a supplier, membership or subscription organisation.

Get Safe – Online’s top tips

Never change payment details until you have checked with someone in the supplier organisation who you know to be genuine.

Check bank statements carefully and report any suspicions to your bank.

The risks

• Your business is contacted by someone claiming to be an existing supplier and told to amend the direct debit, standing order or bank transfer instructions to their new bank account. You will not suspect fraud until you are contacted by your genuine supplier to say that the monthly payment has not been made, or goods or services are not delivered.
• You receive an email, letter or phone call from a publishing, information services or other subscription organisation, informing you of revised payment details to a new bank account. You will not suspect fraud until you stop receiving the goods or services subscribed to, including online services such as information resources and news feeds.
• Your online bank account is illegally accessed by a fraudster and the payment mandate details altered so that the money is transferred to the fraudster’s account.

Protect your business from mandate fraud

• Always verify requests for amended payments to an organisation directly using established contact details. 
• If a call seems suspicious, hang up and call the organisation using established contact details.
• Never leave invoices, regular payment mandates or similar information unattended for others to see.
• Check bank statements carefully and report anything suspicious to your bank.
• Make sure colleagues, particularly those in a finance function, are aware of the risks.

www.met.police.uk/mandate-fraud

If you suspect that you have been a victim of actual or attempted mandate fraud, then notify

• Your bank immediately if you notice any unusual activity on your account or suspect that mandate fraud has occurred.
• The organisation which has been impersonated.
• If fraud has been committed, report it to Action Fraud on 0300 123 2040 or online at www.actionfraud.police.uk. If you are in Scotland, contact Police Scotland on 101.

Mandate fraud losses approach £100m in 2018/19

Businesses are being warned about the dangers of mandate fraud after figures revealed that reported business losses reached almost £100m in 2018/19.

According to the data obtained from the UK’s national fraud and cyber-crime reporting centre, businesses submitted 3,577 reports about mandate fraud in 2018/19 which totalled £99,283,213 of losses and an increase of 28 per cent from the previous year.

The average amount lost by each business was £27,756, representing a 24 per cent increase from 2017/18.

Mandate fraud is not a new phenomenon, but it’s very concerning that the average amounts lost to this type of fraud are rising sharply.

If staff receive the right training and if the correct controls are in place, there’s no reason why these fraud attempts should be successful.

While some larger businesses may be able to absorb the losses, for smaller companies already struggling with cashflow issues, a loss in the tens of thousands can prove critical and can lead to the insolvency of the business.

If you want to find out anything further about this topic then please feel free to call on 0330 236 9930, 0330 236 9938 or 07961 116321. All conversations will be in strict confidence. You can also email vee@navigatebr.com

This article is for information and interest only. It is not a substitute for full professional advice, which will take in to account the specific and individual circumstances. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising as a result of any person or organisation acting or refraining from acting on any information.