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Warning issued over new fraud hitting a number of industries

Bank fraud group issues practical advice to help fight invoice fraud

As evidence mounts of a scam aimed at a number of industries and sectors, Financial Fraud Action UK is warning employees about the danger posed by the rapid spread of fake invoices. Evidence compiled by the National Fraud Intelligence Bureau shows that a total of industries are being targeted by individual fraudsters and criminal gangs. These industries are:

  • Airport
  • Education
  • Financial services
  • Food and drink
  • Health care
  • Local government
  • Pharmaceuticals
  • Travel

Invoice Fraud is where a genuine invoice from a supplier is intercepted by fraudsters who then change the bank details on the invoice to an account under their control. The unwitting business then settles the invoice to the phony account and the fraud is only discovered when the genuine supplier contacts the business regarding non-payment.

A variation on the scam is when fraudsters are aware of existing relationships between businesses and suppliers with regular payments being made and they contact the business, under the guise of the known and trusted supplier, to inform them of a change of bank details. The business finance team will often take this information in good faith and change the details, thus paying money directly to the fraudsters.

DCI Dave Carter, Head of the Dedicated Cheque and Plastic Crime Unit (DCPCU) said

“This is a simple but effective fraud and intelligence shows us that it’s on a steep rise. The National Fraud Intelligence Bureau have identified which sectors are particularly vulnerable, with losses for businesses often running into hundreds of thousands of pounds - several cases have exceeded £1 million.

“Because it can take time for the fraud to be detected, in many cases the funds are quickly transferred outside of the UK which makes it impossible to get the funds back. So we are urging the pharmaceuticals industry to be on the lookout for suspicious invoices and to raise questions if they are unsure.”

Advice to help you spot and avoid Invoice Fraud

1) How can I spot this Fraud?

Counterfeit invoices sometimes don’t stand up to scrutiny; by comparing a counterfeit invoice with a genuine invoice, you’d be able to notice the differences, by perhaps, a blurred or less sharp logo on the false invoice. In some cases where there have previously been no payee bank details on the invoice, the fraudsters have typed their account number onto a genuine invoice, to get the payment. Look out for different contact numbers and e-mail addresses for the company as these may differ to those recorded on previous correspondence. The contact e-mail address may only include a minor amendment giving the impression that it is correct. For example it will look almost identical to the previous e-mail address but may read “.org” instead of “.com” or “.co.uk”.

2) How can I reduce this risk?

To mitigate against this type of fraud, there are certain steps you can take to stop your business being vulnerable to invoice fraud. Follow these simple steps below and you’ll not only be protecting yourself, but also your place of work against these fraudsters.

  • Always confirm change of bank account requests with the company making the change. Use the contact details you have on file rather those that are provided on the letter requesting the change.
  • Consider setting up designated Single Points of Contact with companies to whom you make regular payments. This could be a person or department that you have regular contact with to raise any issues with invoices.
  • For staff who handle invoices, make sure that they look out for any irregularities, including a change of name, amount or address.
  • Consider sending out an email to the company invoicing you using the contact details that you have on file, letting them know when you’ve paid them, and the bank details that you’ve credited .
  • Fraudsters look on websites to identify your suppliers of goods and services. Consider if it’s necessary for your business to publish this information.
  • For large payments, think about setting up a meeting with the company involved to satisfy yourself that the payment will be sent to the correct bank account and recipient.

If you think that this type of fraud has already happened to you, please contact Action Fraud to report it on 0300 123 2040 or via the website reporting template at www.actionfraud.org.uk.
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For more information, please contact our press office on 020 3217 8436 or press@ukcards-ffauk.org.uk

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