You may have seen a recent news article regarding Kent Brushes, a long-established business and hairbrush supplier to the royal family, who lost £1.6 million in minutes after falling prey to authorised push payment fraud (‘APP’) in July 2023.
APP relates to any fraud where a bank customer is scammed into making a transfer by instant payment and the funds have gone before the customer can stop it. In the Kent Brushes case, the fraudster convinced the financial controller that the company’s funds were at risk and was given access to the bank account. To date, none of the funds have been recovered or the fraudster identified.
You may think how can that happen? But, in the heat of being convinced that the business will lose all of its money, would you be thinking clearly? Maybe the staff were not aware of the threat of APP and didn’t realise how it could happen to them.
It is startling to note in 2021 the UK lost £583 million to APP and the threat is still growing. In many instances, it may take months to get any money back from the banks - if you ever get any. Sadly, there are few instances where the fraudsters get caught.
For the business, management and employees, the impact of APP will almost certainly be considerable stress and disruption as you try to recover the funds from the banks involved, but we’ve seen examples where it could also involve:
So how robust is your business to prevent it being caught by APP? Ask yourself the following questions:
If you are unable to answer ‘yes’ to any of the above then you need to review your procurement policies and procedures to ensure your staff have the tools to prevent you falling victim to APP or other scams.
As ever, the moral of the story is always prevention is better than cure. At Armstrong Watson we can help by reviewing your existing policies and procedures and assisting you to develop robust anti-fraud measures.