Why is invoice and mandate fraud posing a major threat to businesses?

Invoice and mandate fraud pose a major threat to businesses across the UK. The latest figures from UK Finance show that fraudsters stole almost £93m from UK firms in 2018 through this type of scam. There were 3,280 invoice and mandate fraud cases involving businesses last year, while the average payment made was £20,750, showing how costly these scams can be. Invoice fraud typically involves criminals targeting businesses by email, posing as a regular supplier and then making a request for their bank account details to be changed. Firms are then tricked into sending money to an account controlled by the fraudster rather than the genuine supplier.

Despite the millions of pounds being lost to this type of fraud, many firms are still not fully aware of the risks. UK Finance's latest Business Payments Report has found that over four in ten (43 per cent) of businesses were unaware of the existence of invoice fraud. The report, based on a survey of 1,500 businesses across the UK, found that awareness of this type of scam tends to rise as the size of the business increases. Only 55 per cent of sole traders were aware of the threat of invoice fraud compared to 84 per cent of large businesses. However, invoice fraud could happen to businesses of all sizes, so it's vital that all employees are trained to identify potentially fraudulent transactions.

UK Finance is raising awareness of how to stay safe from invoice and mandate scams through our Take Five to Stop Fraud campaign. Criminals can access or alter emails to make them look genuine. So it's important never to reply to the contact details in an email, and instead contact the company directly via the details provided on their official website or documentation. You should also always confirm any bank account details directly with the company either on the phone or in person before you make a payment or transfer any money. The gangs behind this type of fraud are increasingly sophisticated and will often get hold of details such as the date when regular payments are due, to make their approach more convincing. Employees should therefore be vigilant about not giving away this kind of information and being suspicious about any unexpected approaches.

The finance industry continues to fight fraud on every front, investing in advanced security systems to protect businesses and customers and finding new ways to track stolen funds. But fraud is an issue that threatens us all, and the money stolen goes on to fund even more damaging crimes such as terrorism, drug trafficking and people smuggling. It's therefore vital that we work together to raise awareness of invoice scams amongst all businesses, from small firms to large multinationals, to prevent funds getting into the hands of criminals.