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Contributed by the ACCA

The National Fraud Intelligence Bureau (NFIB) has warned of a recent rise in fraudulent activity, particularly ‘invoice fraud’. Vulnerable targets include:

educational establishments such as universities, schools and colleges

councils

airports

healthcare providers

travel related industries

pharmaceuticals

financial services

food and drinks sector.

Invoice fraud usually occurs when a genuine invoice is intercepted, the invoice is altered or counterfeited to include the account payment details to those of the fraudster before it continues its original intended recipient. The fraud is usually only uncovered when a supplier chases for non-payment.

The other side of fraud is where fraudsters identify businesses that make regular payments to a service provider. The fraudsters will make contact by submitting a change of account notification to the remitting business. Again this fraud is usually only uncovered when a supplier chases for non-payment.

How to detect the fraud?

The altered or counterfeit invoices will usually not stand up to scrutiny, the invoice may appear to be scanned and the company logo may not be as sharp. Where the bank details have been changed the print type may differ from the rest of the invoice and there may be no payee account details. Contact details may be changed, check contact number and e-mail address which could be subtly changed by using a different suffix like .org or .com or .co.uk instead of the usual e-mail address ending.

Other actions that can be taken to help protect businesses against invoice fraud:

~ confirm bank account details when a company makes changes using your usual contact details and not those on the invoice with the changes unless they are the same

~using a single point of contact with businesses where regular payments are made

~train staff to check invoices thoroughly and for any irregularities

~ informing suppliers that payment has been made following as invoice confirming account details of where the payment is made, being careful about providing accounting details

~ checking accounts details of suppliers that have been changed, confirming before the next payment is due that the correct changes are recorded on your system, taking care to contact the correct business

~ consider setting a threshold, where payments above this level will mean setting up a meeting with the business to confirm account detail changes.

Although in some cases money has been recovered, it is often transferred outside the UK quickly. The NFIB has confirmed that losses have exceeded £1m in some instances; therefore it is essential to have systems in place to help reduce exposure to invoice fraud.