Warning over £93m invoice fraud losses

Over four in ten businesses in the UK are unaware of the risks posed by invoice fraud, despite these scams costing firms almost £93m in 2018, research from UK Finance has revealed

Invoice scams take place when fraudsters trick businesses into transferring money by posing as legitimate payees, with £92.7m lost to such scams last year. According to UK Finance’s annual fraud report, there were 3,280 invoice and mandate scam cases involving businesses over the year, with an average loss per case of over £28,000.

Only a third (£29.6m) of the money lost to this type of fraud was returned to business customers.

Separate research from UK Finance’s business payments survey has found that 43% of businesses were unaware of the existence of invoice fraud.

The poll of 1,500 firms across the UK showed 55% of sole traders were aware of the threat of invoice fraud compared to 68% of small business and 84% of large businesses.

Smaller firms were also less likely to have experienced invoice fraud, with around just 6% per cent) of sole traders having been targeted compared to 26% of larger firms.

Only 14% of sole traders have taken steps to protect themselves from these kinds of scams, compared to around half (47%) of small businesses and two thirds (63%) of large firms.

Katy Worobec, managing director of economic crime at UK Finance, said: ‘Invoice fraud could happen to businesses of all sizes. It’s vital that all employees are trained to identify potentially fraudulent transactions and follow the advice of our Take Five to Stop Fraud campaign.

‘The gangs behind this type of fraud are increasingly sophisticated and will often get hold of details that allow them to pose convincingly as regular suppliers.

‘If a someone contacts you asking for a supplier’s bank account details to be changed, always verify with that supplier separately on the phone or in person, using the contact details you have on file.’

Invoice fraud involves criminals targeting businesses by posing as a regular supplier and making a request for their bank account details to be changed, often by email. Businesses are then tricked into sending money to an account controlled by the fraudster rather than the genuine supplier. Often the criminals will try to acquire details from businesses, such as the date when regularly payments are due, to make their approach more convincing.

UK Finance Fraud the Facts 2019 is here.

Business Payments Survey 2019 is here.

Report by Pat Sweet

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