Is your business at risk from invoice fraud?

26/03/2019

Invoice scams are posing a significant risk to businesses of all sizes, with £93 million lost in 2018.

Invoice fraud occurs when fraudsters pose as legitimate payees and trick companies into transferring money into their accounts.

Over the course of 2018, there were 3,280 invoice and mandate scam cases, with an average loss per case of £28,000. UK Finance has revealed that despite the extent of invoice scams, more than one in four businesses are still unaware of the risks.

A study of 1,500 firms across the UK found that 55% of sole traders, 68% of small businesses and 84% of large businesses were aware of the threat, and that smaller firms were less at risk of being targeted than larger firms.

However, invoice fraud could affect businesses of any size, so it’s essential that all businesses are fully aware of what they should be looking for and doing to stay safe.

Staying vigilant

Take Five to Stop Fraud gives the following advice:

• Any bank details should be confirmed directly with the company, either on the phone or in person, before you make a payment.
• Rather than using the contact details in an email, which may have been altered, check them on an official website or in any documentation you may have.
• If you are making your first payment to a new payee, transfer a small sum first and confirm that they have received it before making a full payment.
• If you suspect that you have fallen victim to fraud, contact your bank immediately.

Any supplier requesting to change the bank details you have for them, particularly via email, should always ring alarm bells and be checked out.

Criminals will often try to acquire details to make themselves look more genuine and the techniques they use to commit the fraud are sophisticated.

It may also be worth establishing at least two points of contact with all your suppliers that you can get in touch with in the event of an invoice query, and always send confirmation of a payment to the payee which states what you have paid and when.

This should mean that if you have fallen victim to fraud, you are likely to catch it more quickly and have a higher chance of recovering the money.

Causes for concern

There may be other indicators that something is not quite right about an invoice.

If you ever feel that a supplier is unduly pressuring you into making a payment, take this as a sign that something may be wrong. Even more so if this is out of character for the company. Fraudsters will often try and build urgency around payments in the hope that you will bypass protocol or further checks that may reveal them.

You can also compare invoices that seem unusual to previous invoices from the company. You may notice minor differences such as a blurred logo, a slightly different font/layout or changed contact details that could suggest the latest invoice is fraudulent.

Have you ever been affected by invoice fraud? What preventative steps have you taken to protect your company?