Beware of Invoice Fraud

  • Published on: 27 August 2019
  • By: Paula
Beware of Invoice Fraud

“Invoice fraud happens when a company or organisation is tricked into changing bank account payee details for a sizeable payment.”

We experienced this recently when one of our customers contacted us to query a letter they’d received asking them to change our bank details for all future payments.  The letter looked professional and showed Leisuresec’s logo, address, phone and email, but it wasn’t written on our usual letterhead.  It also provided company registration and VAT numbers which were incorrect, along with a sender’s name not known to us.  But had our customer not called to confirm they would have paid their next invoice to the fraudsters.

We are writing about this to make other companies aware of the risks. According to banking trade body UK Finance 45% of sole traders, 32% of small businesses and even 16% of large businesses aren’t aware of the threat of invoice fraud.  £29.6m was lost to this type of fraud in 2018, with an average loss of more than £28,000 per case.

Financial Fraud Action UK provides the following list of steps companies can take to protect against invoice fraud.

  • Ensure that all staff who process supplier invoices and who have the authority to change bank details are vigilant. They should always check for irregularities including changes to supplier names and addresses and changes to invoiced amounts.
  • Changes to supplier financial arrangements should always be verified with that supplier using their established on-file details.
  • When a supplier invoice has been paid, it is good practice to inform that supplier of the payment details made, including the account the payment was made to.
  • Check company or organisation bank statements carefully. All suspicious debits should be reported to your bank immediately.
  • If you are suspicious about a request, ask if you can call back. Do so using their on-file contact details to establish if they are the genuine supplier of the goods or services.
  • Perpetrators of fraud often conduct extensive online research to identify suppliers to particular companies and organisations. Consider if it would benefit your company or organisation to remove this information from your website and other publicly available materials.

Download the Financial Fraud Action UK invoice fraud leaflet.