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Invoice fraudsters target financial firms

Invoice fraudsters target financial firms

Financial advice firms have been warned to be on their guard against invoice scams after figures published on Sunday (24 March) showed fraudulent billings cost businesses £93m in 2018.

The figures, from trade group UK Finance, were published in a survey of UK finance businesses which found that 43 per cent of small businesses were unaware of the risks posed by invoice fraud, where criminals dupe firms into transferring money by pretending to be legitimate payees.

Firms reported 3,280 invoice and mandate scams during 2018, according to the UK Finance Fraud: The Facts 2018 report, with the average loss totalling more than £28,000. Just £29.6m of the £93m total was returned to businesses.

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."

UK Finance found 26 per cent of firms with more than 250 employees had experienced invoice fraud, but only 63 per cent had taken steps to protect themselves.

For medium sized firms, with 50 – 249 employees, 17 per cent said they had experienced invoice fraud, while 43 per cent had implemented protective measures.

UK Finance warned the criminals would usually target businesses by pretending to be a regular supplier and requesting a change of bank details.

It cautioned firms to watch out for enquirers seeking payment details to make their requests appear legitimate.

"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," Ms Worobec explained.

"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."

Just more than half of sole traders (55 per cent) and 60 per cent of ‘micro’ businesses - with one to nine employees - stated they were aware of invoice fraud.

About one in five sole traders said they had taken steps to protect themselves, compared to 43 per cent of businesses.

"If you suspect you’ve fallen victim to fraud, contact your bank immediately and report it to Action Fraud," Ms Worobec said.