The F Word in our industry is FRAUD.
For as long as money is changing hands there are people (or organisations) that will find a way to cheat the system. Fraud will never be fully eradicated and as quickly as technology develops, fraudsters will find a way to manipulate it.
The Covid pandemic has been something of a gift to them. The many schemes offered by the government provided a perfect opportunity for abuse and the Treasury announced in January that it has written off £4.3billion which will affect all of us as tax payers.
The ripples of fraud are far reaching. A recent fraud has cost our industry in the region of £180million of losses; this will make underwriters more cautious and it will in turn become increasingly difficult for genuine businesses to obtain funding. Some responsibility has to lie with the introducers – there is an element of human error here. Traditional ‘sniff tests’ were ignored, perhaps some procedures weren’t followed due to covid restrictions, or the big numbers were too good to miss out on but there is a simple rule of thumb – if something seems too good to be true, it usually is.
Fraud on this scale is thankfully rare but there are a lot of smaller instances and the most common scam is a simple case of identity theft. The responsibility to prevent fraud is a shared one: We can all work harder to avoid falling victim and as business owners there are steps we can all take to protect ourselves and our companies