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Upsurge in fraudsters targeting small businesses with invoice and phone scams

27th October 2014

Financial Fraud Action UK (FFA UK) has seen a rise in the number of fraudsters targeting small businesses using invoice and phone scams to defraud them out of money.

FFAUK is warning small businesses they are a major target for scammers. Their intelligence bureau has reported an upsurge of two scams in particular – invoice fraud, where criminals send in fake requests for payment – and phone fraud, where companies are telephoned and tricked into revealing important payment details. Because the fraud is not always detected immediately, stolen funds are often quickly transferred outside of UK making it nearly impossible to get the money back.

Invoice fraud

How the scam works: Criminals are researching the existing suppliers of companies through publicly available information and then contacting the business either by phone or written correspondence pretending to be their supplier and requesting that payment details are updated. With companies routinely asked to change or update payment details, the request seems perfectly reasonable but when the money is processed, it is sent to an account held by the fraudster. 

How to prevent it: You should immediately be on alert if you receive a call out of the blue asking you to update payment details. The criminals will have done their homework on you – so don’t assume because they know a bit about you and your company that they are genuine. If you’re not sure who you are speaking to, call the company on a number that you know, and ask to be put through to the person who you’ve spoken to before. If you’re unsure about the validity of an invoice, call a contact who you know at your supplier to check its authenticity.

Phone fraud

How the scam works: Criminals are researching companies and then telephoning them up armed with information which makes their approach sound more credible. They will then lure the company owner or employee into revealing key financial information or convince them to transfer money into a different account under a false pretence – such as to help prevent fraud identified on their bank account. The criminal may pretend to be from a bank or from law enforcement agencies. The trick is often successful because criminals ask their victim to hang up and call back on a number they trust, while the criminal simply keeps the line open. Then, unknowingly, the victim finds themselves talking to an accomplice of the criminal on the same line. 

How to prevent it: You should immediately be suspicious if you get a cold call and are asked a lot of questions relating to your company’s financial information. There is no legitimate reason for the police or your bank to ask for your four digit PIN, or to ask that you transfer or withdraw money, or give your card to a courier for them to collect. If you are asked to do any of these things, someone is trying to con you. If in doubt, call back the organisation on a number you trust but do it on another phone or leave it five minutes. This is important because criminals are able to keep the line open for two minutes after you put down the phone, which means you could end up inadvertently talking to the criminal or their accomplice again.

Commenting, Katy Worobec, Director of FFA UK said:“Criminals are turning their attention to businesses because successfully scamming a company can net the fraudster a much bigger haul than they could steal from an individual. Fraudsters also understand that small businesses are used to processing all kinds of payments and so a simple request to change an invoice or provide some financial information has a good chance of deceiving an accounts department.

“To avoid falling victim to the fraudsters, always double-check who you’re talking to and be suspicious if you receive a cold call and are asked for lots of information. If you’re ever in doubt, ring back the company on a number that you know, and ask to be put through to the person who you’ve spoken to before.”

Read more on the Financial Fraud Action UK website.

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To report a fraud and receive a police crime reference number, call Action Fraud on 0300 123 2040 or use our online fraud reporting tool.