June 24th, 2022

How your business owner clients can better protect themselves against advanced financial scams

In today’s world, your clients’ businesses are weathering multiple storms at once.

In 2020, the Covid-19 pandemic had a serious impact on the viability of many SMEs in the UK. Now, the cost of living crisis is proving challenging for business owners up and down the country.

One way in which your clients’ businesses could be vulnerable is through their susceptibility to scams.

Many savvy business owners may feel they are already wise to fraudsters, but according to UK Finance, the number of SME scams is rapidly increasing. In the first half of 2021 alone, UK businesses lost £59.2 million to fraud – up 35% from 2020.

What’s more, UK Finance reports that of the 80% of SMEs that claimed to have received an unsolicited text or phone call, one in six did not challenge them. This means your clients, however aware they may be of fraudsters, could still be vulnerable to advanced scams.

Simply by being unaware of how scammers could access their corporate or personal information, your clients could be putting their hard-earned wealth at unnecessary risk.

So, read on to find out how your business owner clients could remain wise to advanced financial scams, and how working with a financial planner could help keep their money safe.

Clients should stay aware of scam “trends” that have emerged in recent years

While financial criminals have been operating for many years, there are new fraud “trends” that could threaten your business owner clients’ wealth.

Here are four examples of advanced scam trends that could affect your business owner clients.

1. Covid-19 support scheme fraud

According to the government website, since March 2020, more than 1.6 million businesses received Covid-19 support loans worth approximately £80 billion in total.

If your clients’ businesses have been accessing governmental support, or have taken out loans through Covid-19 support schemes in order to stay afloat during the pandemic, they could be vulnerable to scams of this nature.

Indeed, according to the Guardian, a Public Accounts Committee report suggests the government’s handling of Covid-19 support schemes left an “open goal” for scammers. This means criminals could exploit your clients’ need for financial support as we emerge from the pandemic.

2. Cost of living support scams

As we emerge from the peak of the Covid-19 pandemic, UK businesses are facing another hurdle: the cost of living crisis.

Indeed, the Guardian reports that UK police have warned that scammers will “hope to exploit the cost of living crisis”, as business owners and individuals feel pressured to make ends meet.

Your clients’ businesses may be experiencing issues related to the cost of living crisis, including:

  • Supply chain issues, especially if they ship products from abroad
  • Increased shipping and haulage costs
  • Reduced consumer spending resulting in potentially lower profit margins.

If your clients become stressed or overwhelmed by the high cost of living’s impact on their business, scammers could take advantage.

For example, if your client receives an online offer of a “business loan” to help cover rising costs, their need for financial security could outweigh their savviness in a difficult time.

By consulting a financial planner before accepting any loans or support schemes offered over the phone or online, your business owner clients could remain better protected from fraud.

3. CEO scams

In some cases, scammers can impersonate senior managers, or even the CEO of a business, in order to convince employees to transfer funds. A fraudster could gain access to a CEO’s email address, or create a similar one, to commit these crimes.

If your client is the CEO of a business, it may be that they are targeted specifically in a scam of this nature. It is important for your clients to understand that as a business owner with a public persona, scammers may use their identity to defraud the company.

4. Invoice scams

Business owners can’t always oversee every part of their operation. If your clients’ businesses are growing, their employees could be a potential weak point when it comes to financial criminals.

For example, if an employee is contacted by a “supplier” asking them to pay an “overdue invoice”, they may not always think to reach out to your client directly before proceeding. This could lead to a breach in your client’s corporate security, and may result in their company losing a large sum.

Investing in advanced training for all employees can further protect your clients’ businesses

One helpful way to manage scam risk as a business owner would be to invest in further training for employees.

If your clients are concerned about their business’s vulnerability to fraud, making sure the team is aware of potential red flags is important. Your clients could invest in safety training that includes:

  • Making employees aware of the scale and frequency of SME scams
  • Training them to spot common red flags
  • Teaching employees to operate security software
  • Reinforcing the importance of following best practices when it comes to digital safety
  • Urging employees never to make a payment without checking with multiple members of senior management first.

By investing in advanced cybersecurity training for their employees, your clients could sleep better at night, safe in the knowledge that their entire team is aware of common tactics used by fraudsters.

Keeping their personal finances secure can give business owner clients peace of mind

Your business owner clients could be doubly at risk to financial scams. Not only could their SME be affected, but if their personal finances are compromised, this could put the future of their company at risk, too.

An Independent report states that, according to the National Cyber Security Centre (NCSC), a record 2.7 million online scams were removed last year. This figure is four times as high as the number recorded in 2020.

The scams removed included:

  • Texts, phone calls, and emails claiming to be from the NHS
  • Fake celebrity endorsements
  • False vaccination offers that request banking information
  • Extortion emails
  • Screen-sharing investment scams.

If your business owner clients fall prey to any of these advanced fraud methods, their wealth could be put at risk. If they have a personal stake in their company, this breach of their financial security could affect the business, too.

Working with a financial planner can help your business owner clients stay safe from scams

By working closely with a financial expert, your clients could remain more financially secure on both a corporate and personal level.

Your clients can benefit from having an expert on their side – so if they are approached by an unfamiliar source, they can reach out to their financial planner for guidance before proceeding further.

Get in touch

We can help your business owner clients shore up their wealth against fraud. To achieve greater peace of mind for your clients, email enquiries@prosserknowles.co.uk or call 01562 829 222.

Please note

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.

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