Fraudsters target small businesses in networking scam

Small firms in Wigan and Manchester lose more than £100,000 in scam

Small firms in Wigan and Manchester lose more than £100,000 in scam

Small businesses should be wary of proposals made at networking events as two firms lost a combined total of more than £100,000 in scams, according to Ashley Business Finance.

It is believed the two recent recorded cases of fraud may be among many more that have not yet been reported. In both cases the fraudsters claimed to have clinched a major order from a big company, which they were unable to fulfil themselves, and offered a share of the profits in return for help to buy stock.

Both cases have been reported to national fraud reporting service Action Fraud. Ashley Business Finance chairman Jonathan Cranston said that, although the losses were difficult to take for the firms involved, the amounts could potentially have been much higher.

“In both these cases the fraudsters had infiltrated networking groups, where people tend to assume they are dealing with bona fide businesses,” he said.

“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.”

Cranston went on to describe the fraudsters as “highly sophisticated” operators who can catch people off guard. He warned that, even if people are able to provide a “plausible paper trail”, any proposals may be bogus.

“Frauds such as these can be devastating for small firms,” he said.

“Our advice is to beware of deals which may appear too good to be true, always check out the companies concerned and never offer to let others take advantage of your finance facility, no matter how good the deal seems.”


Praseeda Nair

Kellen Rempel

Praseeda was Editor for from 2016 to 2018.

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