How You Can Spot Invoice Fraud

Invoice fraud is and always has been easy to commit and also is easy to fall for. However, it is easier than you might think to notice and prevent against. Invoice fraud is the process by which a scammer tricks a company into changing payee details for a product or service that the company regularly pays for. These scammers are experts at finding out about business to business relationship that the victim holds with service providers or buyers and sellers. They may even be aware of regular payment dates or deliveries. We take a look at how you can spot invoice fraud.

How the Scam Operates

A regular supplier or company they often work with will send the victim an invoice. The invoice will be standard but will contain different payment information. Alternatively, it will arrive with a message about changing payee information. The note asks the victim to alter the direct debit accordingly. If the victim does so, they will be paying the invoiced amount to a scammer instead of to the intended legitimate business. Consequently, they will lose this money as well as then still needing to pay any owed amount to the real company.

Fraudulent invoices can be easy to spot, as they may be different from the usual invoices the business sends.  Scammers are proficient at disguising their con though. It is easy to fall for. Successful scammers are very experienced at posing as trusted sources, and often are talented hackers. These scammers also work best on smaller businesses, without dedicated sales/banking departments. They rely on poor communication between employees.

How You Can Spot Invoice Fraud – How to avoid invoice fraud

If all staff who deal with invoices and sales are properly trained, then avoiding invoice fraud and other scams should be second nature. These staff should be vigilant. Checking for irregularities on any and all invoices, including supplier names, addresses and account details. Bank statements should be checked carefully and records should be kept.Thus, they can check anything suspicious against prior statements or queried with the bank. Training employees to be take strict security measures and be tech savvy and cautious can be the difference between losing and keeping your money.

Red Flags

If invoices are usually received via paper upon delivery, then receiving an invoice via email should be a big red flag. Should you receive invoices via email, then staff should know to always ensure they come from the usual email address. If any details are different then they should be immediately checked against records. Even if everything seems legitimate, any requests to change payment details should be queried. Do this with a trusted source within the company. The victim should get in touch with their usual point of contact within the company. Then they must ensure that the request is real and confirm the details.

When an invoice has been paid there are further steps to take. This is so even if the payee has been contacted prior to payment being made. It is good practice to contact the supplier again after payment has been made to confirm. This level of vigilance may seem excessive, but it can be a saving grace. It also helps to establish a good level of communication and openness in business to business relationships.

How You Can Spot Invoice Fraud – Conclusion

At Moolr, we care about businesses and their finances. We know how hard you work for the money you make, and how devastating it can be to lose it. That is why we want to educate businesses both large and small on the threat of scams and how they can safeguard themselves. Business fraud is becoming more and more sophisticated, so it is really important to be aware and up to date on all the latest scams and how they work. We deal with a wide range of lenders and specialist brokers and have the knowledge and experience to examine different finance options and make suggestions to suit our clients. We have a range of loan options. So, if you are in need make sure you get in touch today.