Wednesday, 20 June 2018 13:36

Commonsense Steps for Avoiding Invoice Fraud

If there is a way of defrauding your company out of money, someone, somewhere has already thought of it. In fact, they are more than likely already sitting on a hefty pile of cash from the profits they’ve made illegally.

A lot of attention is paid these days to the sophisticated digital scams carried out by international cybercrime syndicates. But that doesn’t mean anyone can afford to take their eye off the ball when it comes to less technologically advanced tactics.

On that score, invoice fraud is about as straightforward as it gets. It boils down to a fraudster contacting a company posing as a supplier and persuading them to change the payment details on an invoice.

Instead of monies owed going to the legitimate supplier, payment is made to an account operated by the criminals. Repeat payments can go undetected for months, especially if the genuine supplier is not on top of checking that payments come in on time.

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Rather than sophisticated technology, invoice fraudsters rely on guile, persuasion, timing and outright brazen cheek. They also prey on the trust of businesses which do not have robust systems in place for checking the legitimacy of payments. Sadly, invoice fraud disproportionately impacts on small businesses.

The first line of defence against invoice fraud is awareness and common sense. Here are some simple steps to take to protect your business.

Educate yourself and your staff

A lot of people simply do not realise that invoice fraud is a thing. If you are charged with processing invoices and you get a polite, reasonable-sounding request to alter payment details, you are unlikely to think twice about it - unless you are aware of the possibility of invoice fraud. Make sure you are up to speed with the tell-tale signs and the typical tactics used, and share them with whoever is authorised to handle invoices.

Follow up on every payment change request

The simplest defence against invoice fraud is to make it company policy to follow up every request for a change of payment details with a known contact at your supplier. That way, you can quickly determine which requests are authentic and which are dodgy.

Always confirm payment has been made

Again, another sensible precaution to take is to always confirm with a supplier by phone or email that an invoice has been paid. They then know to look out for the money in their account - if it doesn’t turn up, you know something suspicious is going on.

Alert your bank to any concerns

If you do have any reason to suspect you might be the victim of invoice fraud, alert your bank as quickly as possible. Fraudsters are very good at spiriting money away through networks of accounts, meaning that it soon becomes very difficult to recover funds obtained via invoice fraud. Letting your bank know about a suspect payment straight away gives them the opportunity to freeze the payment before it is completed and the money can be removed.

Image “Fraud Key” by flickr user “Got Credit” is licensed under CC BY 2.0

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