Millions of pounds are lost each year to invoice fraud; find out how you can keep your business, your customers and your clients safe.
What is invoice fraud?
Invoice fraud is an email scam where the payee’s bank details are edited by criminals, so that victims mistakenly send money to fraudsters. It can be devastating for businesses and individuals alike, with millions of pounds being lost every year. Victims are left hundreds or even thousands of pounds out of pocket, and are often unable to recover their money.
The scam starts with the perpetrators gaining access to an email account, either by hacking, stealing the account details or acquiring them through a phishing link. The criminal then waits and monitors emails that are being received and sent from the account, looking for a suitable email exchange where the email account holder is requesting a payment from a business or individual. This business or individual becomes the target, and then the victim, of the scam.
When a suitable email exchange has been found, the perpetrators email the victim themselves. They might do this by contacting the victim directly from the email account that they have access to, or by using a very similar email address. The criminal sends across their own bank details, and the victim sends the payment to the fraudulent account. Victims can be unaware that they’ve been scammed until the real email account holder contacts them again, following up on the missing payment.
Although individuals can be targets of this kind of invoice fraud, the more common victims are companies that regularly receive one-off payments. These organisations are particularly vulnerable to this kind of scam, as they routinely request payments from individuals and other businesses and have a great number of contacts. Once a criminal has access to a business’ email address, this scam can be repeated multiple times.
How can businesses protect themselves?
Scams like these can reduce a victim's trust in your business, and prevent them from continuing to work with you. It can also greatly impact a business’ income if a payment doesn’t arrive when you’re expecting it. If you want to make sure that your customers’ and clients’ money never ends up in a criminal's account, follow these top tips.
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Don’t send bank details over email
One of the easiest ways to prevent this kind of scam is to give your bank details to clients and customers over the phone, rather than over email. This ensures that they have the correct information and the information cannot be intercepted or changed during transit. -
Tell customers about test payments
For large one-off payments, or for customers that are working with you for the first time, encourage them to send a test payment to verify that they’re sending money to the correct bank account. By asking clients and customers to send a penny across first and confirming when it has been received, you drastically reduce the risk of invoice fraud. -
Keep your business secure
Ensuring that your business has sufficient cyber security is one of the best ways to prevent invoice fraud and similar scams. This includes running an up-to-date operating system, sufficient anti-virus and having a backup and disaster recovery plan all help to keep your business safe and prepared. -
Educate your staff on scams
Scams like these are possible by exploiting your business’ biggest security flaw - your employees. Educating your staff on these kinds of scams ensures that your organisation and staff don’t fall for phishing links and fraudulent messages, which can leave your business and your customers out of pocket.
U-Secure is an application which tests your employee’s knowledge by emailing them cyber security courses, and then emailing you their test results. Transcendit can talk you through the software, and help you identify whether it would be beneficial for your business.
Give us a call on 0191 482 0444 to talk to us about how to improve your business’ cyber security
