How does invoice re-direction fraud happen?
Fraudsters will do their research. They will often be aware of the detailed relationships between businesses and their suppliers and know when regular payments are due. Fraudsters may attempt to intercept genuine invoices and change the bank payment details.
Alternatively, they may contact the business by telephone, email, letter or fax, posing as a trusted supplier to make a formal request to change the bank account payment details held.
If the business does not validate the change and settles the invoice, the funds go to an account that the fraudster has access to. The fraudulent payment is then quickly transferred, often to outside of the UK, making the recovery of funds extremely difficult. Often the business does not realise they have been scammed until the genuine supplier chases for non-payment, in some cases this can be weeks or even months later. At this point, it is virtually impossible for the business to get the stolen funds back.
Alternative reports of this scam have included fraudsters falsely claiming to be a senior member of a business, providing account details and instructing an urgent payment to be processed. If the business completes the request, the funds go to an account the fraudster has access to.
What are the warning signs to look out for?
Any unexpected requests to change or update payment details for a regular supplier.
Whether made by telephone, email, letter, or fax, if your business is contacted ‘out of the blue’ to amend bank payee details always treat this as a potential warning sign.
What steps can I take to protect my business from this scam?
Protect your business by:
- Treating any notification to change a supplier’s bank account details as a high risk activity.
- Always verifying a request BEFORE implementing the change or completing the payment. Be mindful not the use the contact details provided on the instruction, instead use established contact details to validate the change.
- Educating staff with responsibility for processing invoices to be alert to invoice scams. To always check for irregularities and to raise concerns immediately.
- Ensuring that senior staff members of your business know about this fraud risk and understand exactly what they are authorising.
- Setting up designated single points of contact with regular suppliers.
- Reconciling accounts daily to help quickly identify potential fraud payments.
- Being mindful of information displayed on your company website and if this could be used to facilitate fraud.
I have lost money to an invoice scam. What should I do?
If you hold a business account with us and have fallen for an invoice re-direction scam recently or may have received a fraudulent request, contact us immediately.
If you don’t bank with us and have lost money to an invoice re-direction scam report it to Action Fraud, the UK’s national fraud reporting centre at www.actionfraud.police.uk or by calling 0300 123 20 40.
Where can I find out more about safeguarding my business against fraud?
More information about protecting your business from fraud is available in the scams booklet below.
Financial Fraud Action UK Leaflet
Little Book of Big Scams - Business Edition
Information is also available by visiting www.financialfraudaction.org.uk/retailer-landing.asp