They say things come in threes – but when during the course of one week, that “thing” is fraud – it’s probably time to sit up and take notice. And there are probably two or three factors which may be at play here – 1) fraud is being carried out more frequently than before 2) our methods of catching it are more robust than before, or 3) perhaps organisations are not so prepared as they were to sweep fraud under the carpet in a damage limitation exercise. Most likely it’s a combination of all three.

Direct, Unchallenged Access to the Accounting System

What has been interesting to note, has been the similarities between each recent case of fraud – and the seemingly simplistic schemes used. Nevertheless, that simplicity has been highly lucrative, with one culprit defrauding the NHS of more than £2m and netting it for himself. And while the individual detail is sometimes audacious and shocking (ring-bearing owls anyone…?), each case has a common theme at its heart. Every court case heard the words “As a trusted employee…” and often the fraud was perpetrated by employees who were not only just trusted, but had  direct, and often unchallenged, access to the accounting system.

Humans can’t help being humans of course, and in an office environment, that often means placing, and wanting to place, trust in people that we may have worked with for years, and who we feel that we know. However, while the profile of fraudsters remains those who are middle-aged and who have worked for the company for several years – there are signs that that’s beginning to change. In a recent report by KPMG, the number of perpetrators in the 25 – 35 age bracket with significantly less experience in the workplace, has increased by 285% in one year, which represents a staggering increase in this demographic.

So what does this mean? Well, although it pays to be mindful of the most likely candidates, fraudsters can and do come in all shapes and sizes. Organisations need to be on the look-out for tell-tale behaviour certainly, but they also need to make sure their purchase to pay policies and procedures are rigorous and risk-free.

Well Managed MSF Works as a Built in Police Force for your Payables

A well-managed master supplier file (MSF) can work as a built in police force for your payables. Managed properly, any changes, inconsistencies or errors will be flagged and monitored. In best-in-class organisations, this is done constantly, on a daily basis – via checking software. In fact, as the Association of Certified Fraud Examiners (ACFE) 2014 fraud study points out – companies who use proactive data monitoring experience losses 60% smaller and 50% shorter in duration than those which don’t. But of course, like anything – the solution you use is only as good as the parameters which are set for it to work within, so organisations have to ensure that the processes around master supplier file management are sound.

Syphoning Some Money off is Easy to Do

In a well-managed organisation, it shouldn’t be so easy to manipulate supplier details and invoices which can ultimately lead to pilfered funds. However, in so many cases from SMEs to large Enterprises, that’s exactly how it’s done. And let’s face it, if you’re an individual with your fingers on the pulse of millions of pounds of cash each day, syphoning some off for yourself is a fairly easy thing to do. Of course, it's not something which would normally cross anyone's mind - but for an unethical individual – then that’s a temptation which will sometimes prove too hard to resist. Your organisation has to be robust enough to counter any attempts if and when they occur.

So in the light of so much fraudulent activity, APN caught up with David Griffiths, CEO of the fraud and duplicate payment detection company, FISCAL Technologies to get his take on the current situation in the UK and he said; “Frankly, it’s not just a UK problem – it’s a global issue that crosses all borders. All the feedback from our extensive customer base over the last 5 years indicates that the problem is increasing. A lot of this could have been due to the recession, or more worryingly due to a faster more electronic, mobile based work environment”

David went on to point out that; “However, at FISCAL Technologies, we put the power and control back into the hands of those who need it – the finance team. With a wide range of fraud and forensic checks on the master supplier file, even the most sophisticated fraudsters are going to get caught out. We’re never going to be able to stop anyone wanting to carry out fraudulent activity – but if you make sure the right controls are in place – you can determine whether it’s your business they decide to target.

APN News covers related P2P Fraud most weeks: