Graydon warns of fraud threat

On the up: All areas of fraud are increasing

Credit reference agency Graydon has warned resellers to prepare for a spike in fraud attacks as the economic backdrop worsens.

The firm recently unveiled its IT Reseller Intelligence Network to help VARs share information on possible problem customers, which Graydon can then investigate (Channelweb, 17 October).

Graydon’s head of intelligence Mark Ancell told CRN that company hijacking, where fraudsters take over legitimate firms by falsifying details on the Companies House database, is on the rise.

“All areas of fraud are on the increase at the moment. People that are not necessarily criminals may turn to fraud in an economic downturn,” he said.

Recent figures from auditor KPMG revealed 128 fraud cases, with losses totalling more than £630m, were heard in court during the first half of 2008. This marks an increase of 50 per cent on the £421m losses in court cases heard during the latter half of last year.

“In the IT channel it is higher than most other industries, which is partly to do with the value of the goods and the ease with which they can be sold on,” said Ancell. “Distributors have become wiser to it, but fraudsters have moved further down the channel to tier-one or tier-two resellers.”

Graydon revealed the IT Reseller Intelligence Network had the backing of a number of top distributors, including Computer 2000, Bell Micro, Westcoast and Computacenter Distribution.

“If a VAR gets hit for a £200,000 fraud they will find it difficult to carry that cost and that could affect distributors,” said Ancell.

Stewart Hayward, commercial director of online VAR WStore, claimed handling attempted fraud
is time consuming for his firm.

“We have trade accounts and there have been instances where a customer has taken on the persona of a firm and posted fraudulent accounts with Companies House to make a dormant company look active.”

Hayward said his firm would always alert Companies House and credit insurance companies, as well as personal business contacts.

Adam Harris, managing director of reseller Bear IT, was another to claim that sharing information with other companies could be beneficial.

“I think it is a good idea and hopefully the channel can pull together a lot tighter,” he said. “Fraud has always been an issue, but I would not say it gave me sleepless nights; it might hit some of the bigger boys more.”