In a move aimed at stemming the massive rise in fraud attacks against companies in the IT sector, the PCA is launching the Fraud Prevention Network (FPN) in partnership with P&A Receivables Services plc (P&A), writes Keith Warburton, executive director of the PCA.
The Fraud Prevention Network will provide ICT resellers, distributors and vendors with a swift, efficient and effective way of protecting their businesses from the growing number of fraudulent practices, such as CNP (card not present) and VAT carousels, that are increasingly being used to target hi-tech companies.
Chairman of the PCA, Derek Jones, commented : “Over the past year fraud has become the scourge of the industry with losses to UK businesses now approaching £1 billion – much of it being suffered by the IT industry. We felt that it wastime someone provided some kind of protection that our members could use to guard against losses from would-be fraudsters. We’ve previously operated a Fraud Alert system for our members, but that was reactive, FPN is a scheme that puts the initiative firmly back in the hands of the trader.
The PCA has teamed up with P&A to provide a simple and affordable service that its members and companies right across the industry can use to protect their business against underhand practices.”
Jon Atherton, VP of Enta Group and Business Development Director for the PCA, says that the launch of the service is an important step in the IT industry’s fight against fraudsters. “Fraud is a growing problem in the ICT industry and it is high time we all took a stand against these practices and I’d encourage everyone in the channel to make use of the FPN service to add another layer of protection to their business.”
Derek Jones expects an enthusiastic response from smaller business resellers and retailers . “Fraud is a growing problem even for the smallest of our members and I believe this new service will be embraced with real enthusiasm by members of the PCA and also Integra.”
The Fraud Prevention Network has been launched with the aim of assisting members, initially via risk assessment and a highly focussed forum, in the prevention and - or reduction of loss caused by criminal or fraudulent activity. It is emerging at a time when losses through fraud are now greater than losses through bad debt.
Losses to business through fraud have grown massively to £942million per annum. Card fraud, identity fraud and false cheques have spiralled dramatically, up from £37m in 2004 to £360 million in 2005 – but over half of all fraud (£468m) was by management or company employees. The bulk of fraud is perpetrated by individuals at management level. (Source KPMG Fraud Barometer 2005)
Currently, £1.4 million is being lost to credit card fraudsters every day, with an incident taking place every 8 seconds. Although Chip and Pin may help tackle a lot of credit card fraud issues, Card Not Present fraud, which was worth £150 million last year is set to see a massive growth. (Source APACS). Because of the high value, small size and highly negotiablenature of goods in the ICT sector, it is a prime target for fraudsters.
FPN is cross-industry, sharing best practice with other businesses as well as benefiting from advice from experts in the field of fraud prevention and investigation. The FPN will introduce new and unique methods of fighting crime and will address the needs of fraud prevention personnel across the sectors. Members receive an assessment of the effectiveness of their current fraud prevention processes, which includes a written report with detailed recommendations, together with assessment of current in-house anti-fraud awareness and skill levels. Among other member benefits are workshops and seminars, a help desk and support line, and access to a web-based resource detailing the latest fraud prevention information, and a bulletin board for intra-member communications. FPN Members gain access to many other services including preparation of case files (essential if the local law enforcement agencies are to act) together with direct liaison with those agencies.
The activities of the FPN will centre round regular forums, which will include presentations, workshops and discussions, as well as benchmarking projects. Membership of the Fraud Prevention Network is a flat fee of £500, but with a 20 per cent reduction for Members of the PC Association.
The Fraud Prevention Network is run by the P&A Group, experts in receivables management and fraud prevention. The development of the Fraud Prevention Network supported jointly by P&A and the PCA is a demonstration of their mutual commitment to preventing crime. The FPN is a group run by the members for the members. The success is dependent on the participation and openness of the attendees.
To register for the Fraud Prevention Network, or to find out more contact the PC Association on 01763 262987 or e-mail email@example.com