Businesses are being warned about the dangers of mandate fraud after new figures reported losses reached almost £100m in 2018/19.
The data, obtained via a freedom of information request by accounting firm RSM to Action Fraud, the UK’s fraud and cyber-crime reporting centre, revealed that businesses submitted 3,577 reports regarding mandate fraud in 2018-19, total reported losses rose by 28% to £99.2m.
The fraud occurs when an employee is tricked into changing a regular payment mandate such as a direct debit, standing order or bank transfer and redirecting it into a fraudster’s account.
Usually, these approaches appear plausible as the fraudsters obtain details of staff members’ names and departments during phishing attacks, they will then pose as a supplier claiming it has changed banks, asking for funds to be diverted to the new account.
The fraud will only become known, when the real supplier chases for payment, which in some cases be months later.
Akhlaq Ahmed, forensic partner, RSM said: “Mandate fraud is not a new phenomenon, but it’s very concerning that the average amount 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.”