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SMEs warned to look out for fake invoice scams as staff go on holiday

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  • 25/08/2015
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SMEs warned to look out for fake invoice scams as staff go on holiday
Small businesses are being warned to be on high alert from fraudsters using fake invoice scams to trick owners into sending them money instead of the legitimate supplier.

Figures from fraud prevention experts Cifas and Action Fraud revealed that 749 businesses told Action Fraud they had fallen victim to this type of scam between January and June 2015 compared to 603 in the whole of 2014 and 739 in 2013.

Fake invoice scams typically work by fraudsters pretending to be a supplier and contacting a business claiming the details of the account into which an invoice needs to be paid have changed.

The fraudster relies on the employee taking the conversation on trust and amending the account details, which results in the business sending money to a fraudster rather than a genuine supplier. The more detail a fraudster has about an organisation the easier it is to pose as a supplier and make the scam convincing. In some reported cases, fraudsters have had inside help from employees of the business feeding criminals information about genuine suppliers.

But Cifas and Action Fraud fear that the true level of fraudulent behaviour is much higher as many cases go unreported.

The warning comes in the height of summer, a time when fraudsters have been known to take advantage of experienced staff going on holiday, leaving less experienced or temporary replacements behind who may be less likely to spot the scam.

Although the scam could work on businesses of any size, smaller businesses are most at risk and may find it harder to recover from losing large amounts of money. Surrey police recently revealed they are investigating two allegations where businesses appear to have been conned out of around £1m.

Head of Action Fraud Pauline Smith said: “It is important that employees are made aware of invoice scams and are ready to recognise the signs of fraud. Incidents of invoice fraud are underreported and therefore it is difficult to know the true scale of this fraud type, however, what we do know is that this type of fraud prevails across all types of business and no one type of industry is immune. Those organisations that are worried they may have fallen victim to fraudsters should always report to Action Fraud.”

Tips for businesses to protect against invoice scams:

1. Ensure all staff, not just finance teams, know about this fraud especially those covering roles during the holidays

2. Never respond directly to someone requesting changes to financial details. Instead, use established email and telephone contacts to check that any request has come from the genuine supplier

3. Always review invoices to check for inconsistencies/errors such as a misspelt company name

4. Where possible establish at least two specific points of contact with suppliers so that all invoice changes can be confirmed with both contacts

5. Contact suppliers for payment of larger invoices in advance of making payment to ensure that payment is made to the correct bank account

6. Consider what information is publicly available about your business and whether it needs to be public

7. Never leave invoices unattended in the office or on a desk

8. Ensure your computer systems are secure and that antivirus software is up to date

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