Impersonation fraud is on the rise, according to Business Advice‘s latest article, with small and medium businesses losing an average of £27,000 to fraudsters.
These scams occur when a fraudster uses the information and personal data of suppliers, bosses or business contacts and impersonates them, in an attempt to defraud a company out of money.
Research from Lloyds Bank shows that there has been a 58 per cent rise in this type of crime in the year to date, however as this is only reported fraud, the true scale of the problem is likely to be much larger.
With one in twelve respondents having fallen victim to impersonation fraud, it is likely that nearly half a million SME businesses in the UK have been impacted by these scams.
Commenting on this, Gareth Oakley, managing director of Business Banking at Lloyds Bank said: “The rise of impersonation fraud is a very concerning issue for small and medium-sized businesses.
“We know that falling victim to these types of scams can be serious as the impact extends beyond just the financial implications. This is why we’ve teamed up with Get Safe Online – to help educate business owners and employees on how to recognise these scams and take the right precautions to protect themselves.”
Unfortunately, six per cent of victims have had to make employees redundant due to the financial impact of impersonation fraud, and law firms appear to be the most susceptible victims.
This is followed by HR professionals, IT workers and finance companies.
To raise awareness and educate workers on how to stop scammers, the bank has teamed up with Get Safe Online, the UK’s leading source of online safety information.
Get Safe Online and Lloyds Bank have published a video showing a team of CEO impersonators dubbed the ‘fraudstars’ to demonstrate the ways in which scammers can dupe companies into making payments, based on real-life scams.
This comes as only 20 per cent of victims say they now think twice when receiving a request at work – and the research reveals that a lack of precautions around online safety could be assisting impersonation fraudsters.
Over a third (37 per cent) of employees don’t know what to look out for or don’t have any security precautions in place – leaving them vulnerable.