Fraud Reporting: 5 Simple Steps | Fraud Prevention | Skillcast

If you suspect fraud, you should report it to the relevant authority. We look at what information you need, who you need to contact and how to submit your report.

Fraud is a broad term for activities that mislead, extort and cheat individuals or organisations. In the UK, tax and cybercrime are the most prevalent and damaging types of fraud.

The 2019 Financial Cost of Fraud Report estimated that fraud costs the UK between £130bn-£190bn every year. However, the effects of fraud are more than just monetary. Whatever your role, recognising fraud and taking the appropriate action is absolutely crucial.

How to recognise & report fraud

Ideally, you can prevent fraud from occurring by training yourself and your employees. For example, it has been found that 91% of cyber attacks begin with a phishing email. Regardless of the origins, identifying risks and early security breaches is vital for minimising the impact of fraud.

1. Recognising fraud

Before you report fraud, it’s worth understanding what types of activity may constitute fraud and what rules or definitions are in place. This is solely for your understanding and to help you choose the right reporting authority – you don’t need to make sure that any given activity is fraudulent before sending a report.

Fraud is defined under the UK Fraud Act, but some types of fraud, such as tax fraud, are distinct enough that you need to understand them separately. Returning to the Act, the three main offences are:

• Fraud by false representation: Someone makes a gain or causes a loss to another by falsely representing themselves, either expressly or implied.
• Fraud by failing to disclose information: This is when someone makes a gain or causes a loss to another after failing to disclose information they were legally obliged to share.
• Fraud by abuse of position: When someone in a position of responsibility dishonestly abuses the position to make a gain or cause a loss.

Tax avoidance & evasion

If a business seeks to avoid paying the right amount of tax by either exploiting legal loopholes (tax avoidance), deliberately hiding earnings, or obscuring tax figures (tax evasion), they are committing tax fraud.

If you notice tax fraud in your own business, or you’re suspicious about another company you work with, you’ll need to use the HMRC tax fraud reporting service. Submitting a report can help HMRC punish the offender, possibly leading to criminal proceedings.

Cybercrime

Four-fifths of all reported fraud in the UK is related to cybercrime. In the digital landscape, it’s easier than ever for offenders to falsely represent themselves or maliciously exploit information to defraud you or your organisation.

Though it can sometimes feel embarrassing to fall victim to digital scams, you should report email fraud and cybercrime as a matter of urgency. Though the authorities will help tackle the case, you should also make some additional adjustments to keep yourself safe in future. These are:

• Change your passwords and use a more secure sequence of three random words and symbols
• Install robust antivirus software on all business devices
• Keep all devices up to date and back up important data

2. Gather information

If you want to report fraud, you need some information to provide to the relevant authority. Even a basic level of detail describing the situation, business in question, details of the activity and time/date logs will be helpful.

It does, however, often pay off to gather more context or detail. If you suspect a case of cybercrime, for example, you should gather screenshots and download copies of any related documents to send to the authorities.

3. Identify the correct fraud authorities

Fraud is a varied crime and the circumstances in which it occurs can impact what you need to do and who needs to be involved. If you’re a business owner, for example, and you’ve spotted a supplier who may be engaged in tax avoidance, HMRC alone can handle the report.

If, on the other hand, you’ve fallen victim to fraud at work, you may need to alert more than one authority. The steps you need to take depend on your circumstances:

• If you’ve received a suspicious email, call or text that you suspect is associated with fraudulent activity, you can forward the details to specialist reporting services (more on these in the next step).
• If you spot tax fraud, you’ll need to report it to HMRC. You can find the tax avoidance reporting page here.
• If you’ve fallen victim to fraud or you suspect you might, then report it to Action Fraud – the UK’s national reporting centre for fraud and cybercrime.
• If you’ve been a victim of fraud and have lost money, you also need to notify your bank as soon as possible.

4. HMRC tax fraud reporting

Reporting fraud is straightforward depending on the circumstances and your preference. The easiest way to do it is digitally, with both Action Fraud and HMRC operating easy reporting tools that can be used at any time of day.

• To report most types of fraud, you can use Action Fraud’s reporting service. This can be accessed online, or you can call 0300 123 2040.
  • To use Action Fraud, you’ll need to sign up and create an account.
  • Once done, you can sign-in and access your report at any time.
  • By sharing your email when you sign-up, Action Fraud will be able to email you for updates about the case. 

• To report tax fraud, visit this page on HMRC’s website. Follow the instructions and fill out the information they ask for – though you don’t need to tell them any personal details and can, therefore, remain anonymous.
• To report email fraud, forward the message to report@phishing.gov.uk. If you’ve already clicked a malicious link or otherwise fallen victim to email-related fraud, you’ll need to contact Action Fraud instead.
• To report scam calls or texts, submit details to 7726 free of charge and your provider will either find the details or block the sender.

5. Fraud prevention & protection

Whether you’re a direct victim of fraud or researching it due to suspicious activity you’ve spotted, you’ll now have a better understanding of what to look for to prevent it in future.

Fraud occurs on an individual and organisational level, however, so it pays to put new procedures in place to help prevent further instances.

The following ideas can help you improve fraud prevention both personally and in your team:

• Improve internal security measures for things like passwords and access to key data.
• Implement multi-factor authentication whenever possible as it dramatically reduces your risk of falling victim to fraud.
• Train your employees in recognising fraud. Being able to identify what is or isn’t fraud is the first step to preventing it.
• Implement a fraud prevention procedure for everyone in your business to follow.  Once you’ve trained them to recognise fraud, you need a process in place to correctly notify/report it.

By following this guide, you now know how to identify, report, and protect against fraud. However, you should remain proactive and keep your knowledge up to date, as new scams can crop up at any time.

If you’d like to learn more about fraud prevention, our Fraud Prevention Training can help you become a compliant, competent person within your organisation to help combat fraud of all types.

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