How to Protect Your Business from Invoice Fraud 

Invoice fraud is one of the most effective scams targeting businesses, with Australian companies losing over $16.2 million in 2023 alone. Scammers manipulate invoices by altering payment details or sending entirely fake payment requests, redirecting funds to their accounts. These schemes can be difficult to spot, and without vigilance, your business could be next.

In this guide, we’ll explain how invoice fraud works, the warning signs to watch for, and the steps you can take to protect your business from falling victim to this costly scam.

Key Points

• Invoice fraud occurs when scammers send fake or altered invoices, tricking businesses into making incorrect payments.

• Warning signs include mismatched details, unexpected invoices, and urgent payment requests.

• Protect your business by verifying payment details, training staff, using secure systems, and maintaining vigilance.

What is invoice fraud and How you can to avoid it

Invoices are a crucial part of business operations, ensuring payments are processed accurately and securely. However, as businesses increasingly move their payment processes online, scammers are seizing opportunities to exploit vulnerabilities. Invoice fraud is one such scam, where fraudsters manipulate or forge invoices, redirecting funds to their own accounts.

In 2023 alone, Australian businesses lost over $16.2 million to payment redirection scams, many of which involved fraudulent invoices. At pay.com.au, we are committed to making payments secure and seamless, and part of that commitment is helping you protect your business from fraud.

How invoice fraud works

Invoice fraud is a type of payment redirection scam. Scammers typically impersonate legitimate suppliers by altering payment details on invoices. The following are common methods used in these scams:

• Compromised email accounts
  Scammers access a business’s email system through phishing links or malware, intercepting invoices as they are sent. They modify the payment details and forward the altered invoice, tricking the recipient into sending funds to the scammer’s account.

• Fake invoices from impersonated businesses
  Cybercriminals often impersonate well-known suppliers, sending invoices for products or services that were never ordered. These invoices might claim overdue payments or subscription renewals for services you’ve never used.

• Overcharging and hidden fees
  Some scammers inflate invoice amounts or introduce hidden fees, hoping businesses will overlook discrepancies. If you don’t carefully compare invoices to original agreements, you might unknowingly pay fraudulent charges.

Common invoice fraud tactics to watch for

Scammers are always evolving their techniques, but these are key red flags to be aware of:

• Email discrepancies
  The sender’s email address closely resembles a trusted business, but with minor alterations.

• Unexpected invoices
  You receive a bill for products or services you never ordered.

• Bank Details change
  A supplier unexpectedly asks for payments to be made to a new bank account.

• Urgency and threats
  The email demands immediate payment or threatens legal consequences if payment is not made.

• Suspicious attachments or links
  The email encourages you to open an attachment or click a link to complete the payment.

How to protect your business from invoice fraud

Taking proactive steps can significantly reduce your risk of falling victim to invoice fraud. Here’s how:

• Verify payment detail change requests
  Always confirm any changes to payment details directly with the supplier. Use a trusted contact method, such as a phone number you have on file, not one listed on the email or invoice.

• Train your team to spot scams
  Educate your team on invoice fraud tactics and encourage them to verify payment details before processing any transactions. Consider implementing a policy that requires multiple levels of approval for large payments.

• Regularly update software and security measures
  Keep all business systems, including email and accounting software, up to date. Implementing strong cybersecurity measures can help prevent phishing attacks and unauthorised access.

• Review invoices carefully
  Always compare new invoices with previous ones. Look for discrepancies in amounts, payment details, or formatting. If anything seems unusual, verify with the sender.

What to do if your business is targeted

If you believe your business has been targeted by invoice fraud, act quickly:

• Contact pay.com.au
  If you’ve made a payment through our platform and suspect fraud, contact us immediately.

• Report the Scam
  Notify the Australian Cyber Security Centre through the ReportCyber portal and alert Scamwatch to help prevent future incidents.

Stay secure with pay.com.au

Protecting your business from fraud begins with secure, well-managed payments. With pay.com.au, you can enjoy:

• Bank-grade encryption for secure transactions.

• Greater visibility over payments, reducing errors and fraud risks.

• Flexible payment options, along with the added benefit of earning rewards on business expenses.

By staying informed and using secure payment platforms, you can better safeguard your business from invoice fraud. Ready to simplify and protect your payments? Sign up for pay.com.au today.

Written by Dan Withinshaw

Share this blog

About the author

Dan is a content marketing specialist at staging.content.varklin.com who transforms complex rewards programs into compelling stories. Drawing from his Kiwi roots and global adventures, he brings a unique perspective to finding value in points redemptions. With experience in startups and scale-ups, he helps readers unlock the potential of their rewards. Outside of work, you'll find Dan producing music, mixing on the decks, and immersing himself in Melbourne's sports and music culture.