The Metropolitan Police and Scotland Yard have recently released the Little Book of Big Scams, a downloadable guide to avoiding fraud for SME businesses.

The guide offers fraud prevention advice to safeguard your business against fraudulent acts whilst complying with law and relevant regulations. This advice is for small and medium enterprises but is as relevant to individuals as to larger organisations.

Listed below are some myth busters taken from the guide, but make sure to download the whole thing to become completely aware of how best to avoid fraud.

1.       If a business is registered with Companies House it must be legitimate… FALSE

Companies House is a registrar of companies which incorporates and registers companies in the UK. It does not act as a regulator and does not verify the legitimacy of company operations.

2.       My business has an audit so I am free from fraud… FALSE

Auditors are responsible for ensuring that financial statements are a reasonable reflection of the financial performance and position of the business they audit. It is not their responsibility to detect fraud; this is the responsibility of the businesses’ management.

3. I run a legitimate business. I don’t have to worry about money laundering… FALSE

Many SMEs are subject to money laundering regulations, including money service businesses, virtual office and those regulated by the Financial Conduct Authority. Before setting up a business know where you stand in relations, registration etc. Money laundering regulations have been put in place to protect the UK financial system and thereby place certain obligations on businesses more at risk, including suspicious activity reporting.

Even if your business is not covered by these regulations it is best practice to familiarise yourself with them to ensure that your business does not fall victim to criminal schemes to ‘clean’ dirty money.

4. It does not matter if my employee used my business to conduct fraud; I didn’t know and I am innocent… FALSE

If an employee or manager is able to use your business to carry out fraud against third parties, customers or suppliers, it is possible that the business may be held accountable. There is also a risk that you could be held personally accountable if you did not put in place appropriate controls and procedures to prevent fraud.