Wednesday 28th August, 2013

August… the month when everyone’s away. Even some of my parent’s friends are having a great time of it – living it up in Ibiza apparently. Only the silly old fools seem to have lost their passports and credit cards in one of the island's less salubrious night spots. Which is odd. Odd because if you met them you’d swear they were more the Antiques Roadshow and walking in Provence type..

Obviously it wasn’t them, and a quick glance at the email soon confirmed that it was of course a scam – if the sound of their night spot choice didn’t put me off – then certainly the use of the word “cell phone” by a British person over the age of 60 did.

Yet despite the obviously spurious nature of the content, the fraudsters’ rationale is to spread the net wide enough and someone is bound to fall in. And it works. Across the world, this type of fraud is on the increase, with the rise in networks contributing to the speed and ease of “doing business”.

And the B2B environment is far from immune from very similar types of payment fraud and is - in effect the modern day equivalent of the confidence trickster. In fact, according to KPMG’s latest ‘Fraud barometer’ fraud cases totalling over £0.5bn were recorded in the first half of 2013, up over a quarter on the previous year. They noted that one of the biggest differences this year has been in the number of professional criminals involved – now responsible for fraud totalling £290m. And one of the key drivers for this seems to have been supply chain fraud - worth £61m

Hitesh Patel, UK Forensic Partner at KPMG, says: “While the back end of last year saw a resurgence of traditional con artistry, this year has seen fraud cases turn a darker corner with professional criminals acting across borders for the purpose of defrauding governments and financial institutions. What has been really marked is the increase in the corruption of supply chains by fraudsters.

While procurement functions seek to do relevant due diligence checks on potential suppliers, fraudsters are increasingly getting smarter at getting around traditional procurement processes and controls. Organisations need to make the most of the numerous data sources available and overlay that with the information they have on a third party they plan to do business with. Joining up the data and information dots is a key tool in building a more informed picture to prevent risks crystallising to such an extent that it causes damage to consumers and organisations.”

Of course, it’s impossible to totally eliminate fraud – usually if there’s enough will – they'll find a way. However, the more systems and reports in place to counteract that, the more difficult it will be. Or at least, the more difficult it will be to get away with it for too long.  Like the vision of Jenny and James dancing away to Pete Tong on a sunlit Ibiza beach – some things are just too odd to be true.