Fraudsters are using a new scam to target small firms with established finance facilities, according to a small business finance specialist.
Ashley Business Finance warned other businesses to beware after two of its clients, in Wigan and Manchester, lost more than £100,000 between them.
In both cases, the fraudsters met their victims at networking groups. They posed as genuine businessmen, who had secured a major order from a big company that they were unable to fulfil themselves and offered a share of the profits in return for help to buy stock.
Jonathan Cranston, chairman of Ashley Business Finance, said on 29 March that the losses could have been much greater. He said: “In both these cases the fraudsters had infiltrated networking groups, where people tend to assume they are dealing with bona fide businesses.
“They then cleverly use the conversation to identify firms with access to established factoring or invoice finance facilities, and claim to have won a big contract which they are unable to fund themselves. They persuade victims to buy stock and invoice them for it and, to build confidence, may even pay the first invoice.
“These are highly sophisticated fraudsters who catch people off guard, come up with a plausible story and even provide a viable paper trail using the names of real companies and directors who are unaware of what is happening. However, frauds such as these can be devastating for small firms.
“We are advising businesses to beware of deals which may appear too good to be true, check out the companies concerned and never offer to let others take advantage of their finance facility, no matter how good the deal seems.”
Both cases were reported to Action Fraud, the UK’s national fraud reporting service.
Link: Action Fraud