There are many words used to describe fraud. Scam, con, swindle, extortion, sham, double-cross, hoax, cheat, ploy, ruse, hoodwink, confidence trick.
Fraud is a crime in which some kind of deception is used for personal gain. As technology advances, fraudsters have become increasingly sophisticated and many types of fraud exist. Fraud can be committed against individuals or businesses.
Bank Mandate fraud occurs when someone requests you to change the bank transfer mandate, by purporting to represent an organisation you make regular payments to, for example business supplier, membership or subscription. Fraudsters will look to identify suppliers of services you or your organisation use on a regular basis. This can be obtained from details of contracts awarded or other information which is published on websites in line with transparency. The payment is made as requested and the fraud is complete.
As a business you are contacted by someone pretending to be one of your suppliers who inform you they have changed their bank and request a change to an existing direct debit. As a result the bank mandate is amended to the fraudsters account provided. The next month you are contacted by your genuine supplier asking what has happened with the monthly payment.
Sports organisation example
A private sector sport organisation were re-developing their building. They received an email with an attachment purportedly from the construction company. A Trojan virus was unknowingly downloaded via malware which allowed the fraudster remote back door access to all email traffic. Shortly thereafter an email was received from the fraudster pretending to be from the construction company informing them of a change of bank mandate details and a reminder of an upcoming payment. A six figure sum was thereafter paid to the fraudster’s account. The fraud was complete and funded Serious and Organised Crime.
- Know your top 20 creditors! Mandate fraud is more likely to be perpetrated against a major organisation be alert to any requests to alter their bank details.
- Adopt dual control procedures for authorising payments having a senior member of the finance team to review your activity and if satisfied to authorise the change of bank account details.
- Regularly reconcile your bank statements and report anything suspicious to your bank immediately.
- If the communication is deemed to be a scam - consider sharing this information as an 'Alert' with the National Anti-Fraud Network (NAFN) who will notify other partner groups who may also be affected.
You can find information on different types of fraud and advice on how you can avoid becoming a victim in our fraud advice section.
If you reside in Scotland please report any incidents of Fraud to Police Scotland via 101.
Alternatively, if you reside elsewhere in UK; Action Fraud is the UK's national fraud and internet crime reporting centre, they provide a central point of contact for information about fraud and financially motivated internet crime.
Action fraud A-Z of fraud details further information about different types of fraud.
Outwith UK report to your local Police Service.
If you would like this information in an alternative format or language - please phone us on 101 to discuss your needs.