During the pandemic, worryingly convincing scams and financial fraud have been on the rise, from false tax demands from HMRC, to scam ‘missed delivery’ notes purportedly from legitimate couriers. Some businesses have also fallen victim to false payment requests, in which fraudsters use plausible fake vendor invoices to scam companies.
While most fraud attempts are easily spotted, the sheer volume of such scams at the moment, and the convincing nature of some of them, places businesses at risk of being defrauded if they don’t use a secure accounts payable and statement reconciliation system. In this article, we explore the growing issue of fake invoicing and how AP automation technology can help you avoid being targeted.
What Is Fake Invoicing?
A typical fake invoice scam involves a fraudster pretending to represent the credit control or accounts payable representative of a well-known supplier. They will contact the accounts team by phone, email, or SMS, just before becoming uncontactable, and insist that an invoice is paid immediately.
An alternative approach is for the fraudster to pose as one of your suppliers and send an invoice with new bank details – details for the scammer’s account. Hackers may get into the supplier’s email system to send a fake invoice or buy similar domain names to your supplier, meaning you’re less likely to question it. You may not notice details like the format of the email address being different.
These scams are easy to get caught out by because criminals often do their research thoroughly. They’ll find out the maximum amount you’re likely to pay and won’t make the mistake of issuing an invoice for more. Similarly, some scammers will research your or your supplier’s team online so they know who is likely to send or pay invoices, and therefore who to target. This information is often freely available through LinkedIn, or on the business website.
How Can Your Business Protect Itself?
Whilst fake invoicing is a worry, your business can protect itself. AP automation technology is a fantastic tool for defending your company’s finances from fraudsters. Software is available to reconcile and match supplier statements to legitimate purchase orders, to detect fake invoices, or to protect domains from having their email addresses impersonated.
Secure, automated invoicing systems are also available. These systems allow you to pay genuine suppliers on time, increase efficiency, and save money. If you rely on an automated system rather than individual invoices sent via email, you’re more likely to question a suspicious invoice if you receive one.
You can also protect your business by purchasing domain names that are variants of the one you use. If you own these domain names, it won’t be possible for criminals to purchase and use them for fraudulent purposes. Whilst investing in additional domain names is an expense and the number of potential variants means it’s not a fool-proof solution, it’s a significant step towards being protected from fake invoicing.
Find Out More
At Cogent Consulting, our job is to help businesses improve their accounts payable processes through greater levels of automation and security fail safes. This saves businesses time and money, and also helps avoid both errors – that may lead to duplicate payments – and deliberate fraud. Please get in touch with one of our AP specialists today to find out more.
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