Sneaky tricks of the invoice fraudster to look out for

An invoice lands on your desk. Let’s say it’s for some printer cartridges. It’s a bit strange because it isn’t from the local printer company you usually work with, but you don’t really give it a thought. Perhaps the cartridges needed to be sourced elsewhere for some reason this time. You’re busy, it isn’t worth worrying about and you pass it for payment to the accounts payable team.

 

Stop! While it might be an innocent invoice, it also might not be. Are you sure those printer cartridges were actually ordered from a genuine supplier and actually arrived in your office? Of course you want to avoid non-payment of a legitimate invoice, but finance teams also need to be wary of fraudulent invoices.

 

Invoice fraud is on the rise and rapidly so.  Some estimates suggest UK small and medium-sized businesses (SMBs) lose more than £9bn to invoice fraud every year – that’s equivalent to £1,658 per SMB.

 

And if you think you wouldn’t be fooled by the printer cartridge scam scenario, could you be sure about any of the following?

 

The fake directory listing

 

You receive an email or a phone call purporting to be from someone wanting to feature your company’s details in a directory. The directory might be a familiar name; it might not. Either way, they’ve got a compelling offer: the directory will be going to huge numbers of people or to your perfect target market. Taking the space seems a ‘no-brainer’ so you do. The hefty invoice arrives and you duly pay it. But the directory – or your listing in it – simply never appears. You’ve been had.

 

The IP protection fraud

 

You might be wary of someone selling directory space, but what about something that seems to come from a more official source?

 

Fraudulent Patent Office invoices do the rounds – in fact, they’re so notorious, the government has even published an official warning. The invoices look nearly identical to the real ones. The only trouble is that the bank account details are different.

 

Or what about an official-looking renewal reminder letter or invoice from a company offering its services to help you protect your intellectual property (IP)? Again, it’s something the government has warned businesses about, so common is the fraud.

 

What can you do to protect yourself against invoice fraud?

 

As you will have realised by now, invoice fraud is more common than you think. While you may have spotted one of the cruder fake invoice attempts in the past, could you be so certain with something more sophisticated?

 

Here are our top tips for minimising the chances of you being taken in by an invoice fraudster:

 

Train your staff. It’s all too easy to think that picking up problems is someone else’s job, but when it comes to invoice fraud, it’s something everyone needs to think about. Brief your receptionist to be on the alert. Have reminders on staff noticeboards or in your update bulletins.

 

Check your invoices. Compile a list of companies your business regularly purchases from and raise a red flag whenever you get anything from anywhere else or whenever bank details differ. Cut out manual steps that are prone to human error. This is something that technology can help you with. Make sure employees are being vigilant when they pass an invoice for payment – did they definitely see the directory listing? Did the printer cartridges definitely arrive? Double check payment details such as the bank account number with previous invoices to weed out any false invoices. Confirm purchase order numbers to match actual orders with invoices from legitimate suppliers. This can help avoid issues with duplicate invoices and any potentially suspicious invoices.

 

Report the crime. If you spot a scam, alert the necessary authorities. In the UK, you should report invoice fraud to Action Fraud, the UK’s national fraud and cyber crime reporting centre – it’s easy to do it online at www.actionfraud.police.uk. If the fraudulent invoice arrived in the post, the government advises you to keep both the invoice and accompanying envelope in a plastic sleeve and handle it as little as possible to help the authorities take further action where they can.

 

Don’t be caught out!

 

Invoice fraud is a growing problem. Don’t be a victim – be aware of it and have the necessary measures in place to help ensure you’re able to spot it, not fall for it. Prevent invoice fraud by improving accounts payable processes and following some of the simple steps highlighted here.

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