Over a Third of SME’s Targeted by Financial Fraud in Last 12 Months  

New research reveals that one in eighteen attempts of financial fraud on SME’s is successful 

A new survey has revealed that over a third (36%) of Irish SMEs have been targeted by financial fraud in the past twelve months, with 1 in 18 of these attempts proving successful. Using CSO figures, this equates to 4,257 companies who have fallen victim to a scam in the past year.

The research, carried out by Behaviour & Attitudes among a nationally representative sample of SMEs, has been released to mark National Fraud Awareness Week which begins today and will this year focus on financial fraud prevention among SMEs. Fraud Awareness Week is spearheaded by FraudSMART, a fraud awareness initiative led by Banking & Payments Federation Ireland on behalf of the banking sector.

The most common types of scam encountered by SMEs are Phishing Emails (72%), followed by Vishing, a phone-based phishing scam (26%), and Invoice Redirection scams (21%).

In terms of attitude towards the threat of financial fraud, 79% of SMEs identified financial fraud as a potential threat to their business. However, despite the recognition of the threat that financial fraud poses, 68% of SMEs do not have fraud awareness guidelines and training in place.

In addition, over a third of businesses surveyed (35%) stated that they do not confirm the legitimacy of new bank details from suppliers before confirming a payment. Smaller still was the number of SMEs who have invested in fraud prevention software in the past year (26%).

Businesses, particularly SMEs, have been advised by FraudSMART to be extra vigilant, given the ever-increasing threat and sophistication of financial fraud scams.

As National Fraud Awareness Week gets underway, Niamh Davenport, FraudSMART, said, “The research shows the extent to which SMEs are targeted by fraudsters annually. For businesses, the impact of falling victim to a financial fraud scam can be devastating. While businesses are aware of the threat that financial fraud poses, there appears to be complacency around putting guidelines and measures in place to combat it. During National Fraud Awareness Week, and indeed beyond it, I would encourage SMEs to familiarise themselves with the types of scams they can be targeted with and take the necessary precautions to protect their business.”

FraudSMART has developed a brochure ‘Protect Your Business from Fraud’ aimed specifically at the business community. This brochure is available to download, for free, on www.fraudsmart.ie.

National Fraud Awareness week runs from 12th to 18th November. Over the course of the week a social media campaign titled, ‘The Great Irish Cash Giveaway’, featuring Simon Delaney, will air each day on FraudSMART’s social media channels, explaining the five most common types of financial fraud scams. The week will also include a radio advertising campaign and BPFI member banks will also be supporting the week in various ways.