How to Spot Invoice Fraud

Last post: Dec 6, 2019

Invoice fraud is easy to commit and easy to fall for - but it is easier than you might think to notice and prevent against. Invoice Fraud is the process by which a scammer tricks a company into changing payee details for a product or service that the company regularly pay for. These scammers are experts at finding out about business to business relationships that the victim holds with service providers or buyers and sellers. They may even be aware of regular payment dates or deliveries.

How the scam operates

The victim will receive an invoice (usually via email) from a regular supplier or company they often work with. The invoice will be standard but will have different payment information, or will come with a message about changing payee information. The victim is asked to alter the direct debit accordingly. If the victim does so, they will be paying the invoiced amount to a scammer instead of to the intended legitimate business, and will lose this money as well as then still needing to pay any owed amount to the real company. 

Fraudulent invoices can be easy to spot, as they may be very different from the usual invoices received from the business the scammer is posing as, but they can also be very well disguised and easy to fall for. Successful scammers are very practiced at posing as trusted sources, and often are talented hackers. These scammers also work best on smaller businesses, without dedicated sales/banking departments, and rely on poor communication between employees. 

How to avoid invoice fraud

If all staff who deal with invoices and sales are properly trained, then avoiding invoice fraud and other scams should be second nature. These staff should be vigilant - checking for irregularities on any and all invoices, including supplier names, addresses and account details. Bank statements should be checked carefully and records should be kept, so that anything suspicious can be checked against prior statements or queried with the bank. 

Training employees to be take strict security measures and be tech savvy and cautious can be the difference between losing and keeping your money. 

If invoices are usually received via paper upon delivery, then receiving an invoice via email should be a big red flag. If invoices are usually received via email, then staff should know to always ensure they come from the usual email address. If any details are different then they should be immediately checked against records. Even if everything seems legitimate, any requests to change payment details should be queried with a trusted source within the company. The victim should get in touch with their usual point of contact within the company,  ensure that the request is real and confirm the details. 

When an invoice has been paid, even if the payee has been contacted prior to payment being made, it's good practice to contact the supplier again after payment has been made to confirm. This level of vigilance may seem excessive, but it can be a saving grace, and also helps to establish a good level of communication and openness in business to business relationships. 

At Choice Business Loans, we care about businesses and their finances. We know how hard you work for the money you make, and how devastating it can be to lose it. That's why we want to educate businesses both large and small on the threat of scams and how they can safeguard themselves. Business fraud is becoming more and more sophisticated, so it's really important to be aware and up to date on all the latest scams and how they work.

We deal with a wide range of lenders and specialist brokers and have the knowledge and experience to examine different finance options and make suggestions to suit our clients. We can look at anything from a traditional bank loan, to Crowdfunding, Fintech lending, Merchant Cash Advances and similar innovative options.

Drop us an email at or call us on 01494 410 125 to speak with one of our team about what kind of help we can offer you.