Rumours are reaching our ears that one of the big bank owned factoring companies has just taken a £7m hit due to client fraud. This seems to be one of the old fashioned long firm frauds where the company was set up purely and simply to defraud the factoring company.
Also one of the higher profile recruitment back office funding companies has also suffered a £500,000 fraud hit with the apparent fast growth of the recruiter being based on fresh air. Rumours have it that this company is now closed for new business and all of the salesmen have been sacked although I would have thought it was the operational staff that were negligent in this case.
It seems to be the fashion in the media at the moment to knock factoring companies but client fraud has always been factoring’s major problem. Shame it doesn’t make such exciting reading so it rarely gets mentioned.