Have you protected your business against invoice scams?
I’m writing this post the night after a friend’s business was burgled – for a second time.
This morning, when I logged onto Facebook, he had posted CCTV footage of two men kicking in the door to his office, dashing in and leaving with four brand-new iMacs. From the alarm sounding to the intruders disappearing took less than 50 seconds.
Businesses are very alert to this kind of crime. Indeed, after the last burglary a few months ago, my friend invested in extra security features such as the CCTV. Sadly, I think he’ll need to spend money on reinforced doors this time.
But while businesses often work hard to protect themselves from traditional types of crime, an increasing number are falling victim to ever-more sophisticated scams. One growing type is the ‘invoice scam’.
According to UK Finance, businesses lost £92.7m to invoice and mandate scams in 2018. Only £29.6m of this was returned to them. It’s big money for the criminals.
How invoice scams work
The way the scams work can make them hard to spot. Normally a criminal will pose as a legitimate supplier, claiming that their bank account details have changed. They can do this by intercepting emails or compromising a supplier’s email account.
Businesses who pay large sums to their suppliers are most at risk. Yet a seemingly innocent email from a ‘supplier’ could lead you to transferring tens of thousands of pounds to a criminal’s bank account. The average loss to business victims is a whopping £20,750.
So how do you prevent this from happening to you?
How to protect yourself
Finance UK has four tips for protecting yourself from invoice scams. To summarise, they are:
- Always phone a supplier on their official number, or speak to them in person, to confirm any bank account changes are genuine.
- Do not respond to emails asking you to update account details – the emails could be altered to look genuine or could be from a compromised account.
- If you make a payment to an account for the first time, transfer a small sum first. Then check with the company by phone to confirm it has reached their account.
- Contact your bank immediately if you believe you have been a victim of an invoice scam.
Above all, always make sure your staff are trained to be aware of scams like these. If you make it company policy never to update a supplier’s bank details without official phone confirmation, you’ll be making an important step to protect yourself.
Oh, and before I sign off, did you know that there’s also a thing called CEO Fraud these days? This happens when criminals use email to impersonate a CEO, sending a message to the finance team asking for a payment to be made urgently to a new account. According to Finance UK, this cost businesses £13.8m in 2008. So always, always check any unusual payment requests. A simple phone call could save you a small fortune and a whole lot of hassle!
Accountancy Help from THP
At THP Chartered Accountants in Chelmsford, Cheam, Wanstead, Saffron Walden and London City,we help business owners across the south east operate within their means – and get the most out of every penny.