Risky business: Watch out for invoice fraud

04/05/2016

SMEs lose up to £9bn every year as a result of fraudulent invoicing scams, according to research from Tungsten Network.

The report, which revealed that nearly half (48%) of all businesses received a fraudulent or suspicious invoice in the last year, highlights SMEs’ growing exposure to a whole range of fraudulent activities.

This coincides with police figures compiled for Radio 4’s You & Yours programme, which revealed that more than 5,000 people were conned into sending planned payments to fraudsters’ bank accounts last year.

Whilst the methods used by scammers are constantly changing, two scams in particular have been hitting the headlines recently.

The first is where a company’s IT system is infected with malware allowing criminals to spy on emails and then contact customers.

In these instances, victims are fooled by emails asking them to divert payments into criminals’ accounts, leaving the genuine recipient unpaid.

The second scam, known as CEO fraud, is where a criminal pretends to be someone senior in a company and emails a junior member of staff asking them to make a business payment or provide login information to the company’s payroll system.

These emails often come from fraudulent domains that look very similar to the legitimate company website, making them hard to spot.

Other typical scams included embedding viruses in attachments (malware); unknown invoices attached to an email or sent by post (phishing); false changes to bank details; and sending duplicate invoices.

With scams like these becoming increasingly common in the workplace, it’s vital to take the appropriate steps to protect your business and its cash flow.

For tips on how to avoid becoming a victim of these scams take a look at this blog.