In just the first six months of 2023, the authority reviewed around 450 companies and took action in 80 percent of the cases. There are warning flags to take into account, but what should businesses look for and how should they think in order to avoid scam companies? Pontus Holmberg, Head of Product and Innovation at Roaring, explains this and shares his best tips.

Scam companies very much exist and are part of the reality in today’s society. It is the task of the Swedish Tax Agency to control companies, and the authority is obliged to report suspicions of crime to the Swedish Economic Crime Authority and notify its own tax crime unit. In an article on 25 October, Dagens Nyheter reports on the Swedish Tax Agency’s work. The authority has intensified its controls of companies suspected of having been taken over by unscrupulous actors. The Swedish Tax Agency reviewed around 450 companies and took action in 80 percent of the cases in just the first six months of 2023.

Just as Dagens Nyheter reports, a typical warning flag is if a person with previous economic crime takes over a company or if a person connected to the company is suspected of being a front person. A front person means that someone is placed on a board in order to take the criminal liability for someone else’s crimes. But how should companies find out and keep track of this in practice? And what is the expert’s best advice for avoiding scam companies altogether? Pontus Holmberg at the SaaS company Roaring, which provides business-critical information, breaks it all down.

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Hygiene factors – get control over changes in board and address

Has the company moved around, and are there frequent changes to the board? That can be seen as an initial warning bell, and it is a good idea to take an extra look at the business in question.

“If you are going to do business with a company, my first tip is to relate to a few hygiene factors and review historical data. If address changes happen often and there are continuous changes to the board, it is probably time to prick up your ears. It does not necessarily have to be something negative, but it is time to ask questions,” says Pontus Holmberg, Head of Product and Innovation at Roaring.

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Start “locally” – map connections to the company

Which people are connected to the company today, and do the representatives appear in legal contexts? Do these people hold positions in other companies?

“If, for example, there is a person connected to the company who has 12 other positions, it may be time to dig further. That does not automatically have to be bad, but my recommendation is to go a little deeper. It is good to review data such as convictions in order to form a fair picture. When it comes to convictions specifically, it is of course important to look at what type of conviction it is, since some do not necessarily mean that something suspicious is going on,” says Pontus Holmberg, Head of Product and Innovation at Roaring.

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Get an overall picture that does not only cover the company in question

Do not stop in your analysis. If you still feel suspicious, it is time to move on and begin examining board members’ other assignments and their legal information. What do these companies look like, and what other people are connected to those companies?

“It may sound like a long and unbearable process, but the fact is that it does not have to take a long time. If you know what to look for, it can go quickly, and one tip is to do spot checks. If you use a background-check system, such as Roaring, you can also automate processes. And what is important to remember is that we cannot place a value judgment on something and confirm that it is fraud and deception. What we can do is help with insights that lead to a more thorough investigation, which gives you the insight needed to make a well-founded decision,” says Pontus Holmberg, Head of Product and Innovation at Roaring.

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Request a current-state picture through Open Banking

Why do a credit report when it is based on historical data? A better way is to create a current-state picture through so-called Open Banking data. This means that third-party actors, with a company’s approval, can retrieve information about the company’s accounts via APIs. In that way, a picture is created of how healthy the business you want to do business with is – today.

“By gaining access to transactions and other account information, you can determine whether it is a healthy company and whether what the business says is actually true. If, for example, you are going to lend money to another company, is it then not reasonable to look at up-to-date data? If you are denied access to their account and transaction data, it is once again time to ask questions and dig further. This does not only apply if you are going to lend money, but also if, for example, you are going to enter into an agreement or sell products or services of high value,” says Pontus Holmberg, Head of Product and Innovation at Roaring.

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Start at the right end of the analysis

“My strongest tip, which bears repeating, is to start by looking at the soft data. For example, legal information such as convictions, whether the company has F-tax, VAT registration, and so on. That can give an indication of whether it is time to investigate further. Having access to a system that gathers all the data simplifies the process, and companies can feel confident that the data is not only collected in one and the same place, but that the risk of manual errors is also reduced,” says Pontus Holmberg, Head of Product and Innovation at Roaring.

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Also, do not miss the Swedish Economic Crime Authority’s checklist “Do you know who you are doing business with?”.

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Roaring, established in 2016, is a leader in automated customer and supplier checks with a focus on minimizing business risks. Through smooth access to business-critical information, Roaring ensures regulatory compliance and strengthens organizations’ risk assessments – and can at the same time contribute to a seamless onboarding of new customers. All for a world without time-consuming, frustrating, and unnecessarily complicated business-critical processes.

Roaring is ranked as the 14th fastest-growing technology company in Sweden according to Deloitte Sweden Technology Fast 50. During the most recent financial year, Roaring grew by nearly 50%, and the goal is even faster growth in the coming year. Roaring’s headquarters are located in Danderyd, Stockholm.

For more information, please contact:
Sandra Siljestedt
sandra@roaring.io
+46 707-42 42 98

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