UK Businesses Lost £93M Last Year Due To Invoice Fraud

A new report has revealed that invoice fraud cost U.K. businesses £93 million ($122.8M USD) last year. But despite the losses, more than four in 10 businesses in the country are unaware of the risks associated with the crime.

Invoice fraud happens when criminals pose as a regular supplier and make a request for their bank account information to be changed, usually via email. Businesses are then tricked into sending money to a fraudulent account.

“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,” said Katy Worobec, managing director of economic crime at UK Finance.

“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,” she added.

According to UK Finance’s latest Fraud the Facts report, there were 3,280 invoice and mandate scam cases in 2018, with an average loss of over £28,000 and a total of £29.6 million of the lost money returned to customers.

Yet only half (55 percent) of sole traders were aware of the risks involved with invoice fraud, compared to two-thirds (68 percent) of small business and over four in five (84 percent) large businesses. Smaller firms were also less likely to experience invoice fraud, with around one in 20 (6 percent) of sole traders experiencing this type of scam, compared to one in four (26 percent) larger firms.

And only one in seven (14 percent) sole traders are being proactive in protecting themselves from invoice fraud, compared to around half (47 percent) of small businesses and two thirds (63 percent) of large firms.

Even tech giants can be hit with invoice fraud. Last year, Jeff Tran, Microsoft’s former director of sports marketing and alliances, was charged with five counts of wire fraud for trying to embezzle as much as $1.5 million from the company. Tran stands accused of sending two fraudulent invoices to Microsoft, which were sent to the company from other vendors.