Over a third of Irish SMEs targeted for fraud in 2020

Bank of Ireland highlights staff as the first line of defence in the fight against
business fraud

  • New research from Bank of Ireland reveals 35% of Irish SMEs were targeted by fraudsters in the past 12 months
  • Email dominates at 57%, followed by phone calls at 53% as the most common fraud channels to target business
  • 6 in 10 of those who experienced fraud or attempted fraud claimed to have not reported the incident to either their bank or Gardaí – while 23% did report it to their bank only, and a further 14% reported it to both their bank and Gardaí
  • Close to 8 in 10 (76%) indicated they have not undertaken staff training on business fraud in the past 12 months.

Over a third (35%) of Irish SMEs have reported being targeted by fraudsters in the past 12 months, according to new research conducted by Bank of Ireland.

Emails (57%) and phone calls (53%) are the two channels most likely to be targeted by fraudsters, with staff emails (88%) being the most likely to be compromised or targeted. Although the ways in which SMEs experienced fraud varied, the most common forms included receiving an invoice that appeared to be from a vendor but contained amended bank account details (36%) and staff being contacted to make an out-of-course payment (35%).

The research found that persistent fraud attacks are costing businesses significant sums of money, with the average loss associated with frauds targeting SMEs standing at €3,992 in 2020. Despite this, 60% of SMEs who fell victim to fraud or attempted fraud in the past 12 months did not report it to their bank or Gardaí, with 23% reporting it to their business’s bank only and 14% reporting incidents of this nature to both their bank and Gardaí.

Work practice changes due to Covid-19 is causing fraud concerns for SMEs with 19% feeling they are now more exposed to fraud. Brexit is also weighing on SMEs fraud concerns with more than one in ten (11%) feeling more exposed to fraud because of Brexit related business changes.

When it comes to fraud prevention, 73% of SMEs feel their business has adequate safeguards and processes in place, yet over three quarters (76%) report not completing staff training on business fraud in the past year. SMEs are urged to ensure their staff are fully informed around the simple steps to take to safeguard their business against fraud.

Commenting on the research results, Edel McDermott, Head of Fraud at Bank of Ireland said, “Over the past 12 months, and especially since the Covid-19 pandemic began, incidents of cybercrime and fraudulent activity affecting customers and businesses are a growing concern. Our research highlights that email is the most common channel fraudsters use to infiltrate business, which is now even more prevalent with less in-person contact in the office environment. The research also shows a disparity between SME perceptions of their safety levels against fraud versus the actual training and processes they have in place, with 76% of SMEs not completing staff training on business fraud last year. We would advise businesses to make sure their fraud prevention processes are up to date and fit for purpose in a remote-working world.

Fraudsters tactics may change but the message around safeguarding business remains the same. Never send money somewhere just because you were asked to do so in an email. Be suspicious of an unusual or unexpected request from a business contact. Always pick up the phone to a known contact and double check that a request is legitimate.

Bank of Ireland has already built several warnings into our online business payment system to help alert SMEs to potential fraud. We understand that SMEs are under more pressure than ever before, but staff training does not have to be a cumbersome process. At Bank of Ireland we are always available to advise customers on fraud prevention. We will be delivering business fraud awareness sessions to Chambers Ireland members in the coming weeks with tips on what to look out for and some simple steps they can take to update their fraud preventions processes.

Finally, fraud can happen to anyone. A significant number of business fraud cases go unreported. We would strongly advise SMEs to report any suspected fraudulent activity to their bank immediately so that necessary action can be taken to minimise the risk of loss, and then alert the Gardaí.”

Ian Talbot, Chief Executive, Chambers Ireland said, “The big focus for Chambers Ireland in the fight against fraud is to make our members aware of any new forms of fraud taking place and encouraging them to train their staff in the steps to protect their businesses from fraud. Many of the tactics fraudsters use are just new version of old tricks. Remote working presents a whole new raft of challenges for our members, where face to face contact with colleagues is less frequent. But picking up the phone is always an option. We are delighted to work in partnership with Bank of Ireland to provide simple tips and training for Chambers Ireland members to help safeguard their business against fraud”.

Bank of Ireland conducted this research as part of its ongoing Business Fraud awareness initiatives, to heighten Irish SME awareness of the threats posed by fraudsters. The campaign is encouraging businesses to take simple steps to protect themselves against fraud, like confirming payment requests received are genuine by making a quick phone call to the supplier.

Visit our Security Zone for examples of business fraud and for advice on how to protect your business.