Invoice Fraud is the focus of todays article, find out how this scam is run, and how to avoid it.
Small businesses in Britain lose more than 9 billion to fraudster who pose as suppliers. The fraudsters pose on phones where they successfully cloak viruses within bills after which they submit them as false invoices. This is according to the new report which has been released on the fraudster’s trend in the United Kingdom.
The survey was carried out in more than 1,000 SMEs. More than half of the respondents to the survey which was carried out by Invoice Network, they claim to have been subjected to suspicious invoices. Others were subject to full blown invoices in the last year.
On average small business can lose up to 1,658 to invoice fraud in a year. In the last 12 months only, one in six small business claim fraudsters have cost them more than 5,000. This affects their operations negatively.
Pauline Smith, who is the head of United Kingdom reporting center for fraud and internet crime believe incidences of invoice fraud are being under reported.
It is hard to know the exact scale of the fraud, but it actually prevails across the United Kingdom and all businesses are affected. There is no type of business which is immune to the fraud. This is according to Smith.
A recent example involves a telegraph which was received by CompareTheCoffin.com. Steven Mitchell who is the founder of the business which helps bereaved members find cheap coffins received a telegraph which was asking him to provide six coffins which were to be exported abroad.
From the telegraph the customer placed an order via email and asked if they can pay via cheque because they did not have a credit card.
Mr. Mitchell said: The order seemed genuine to him and he gave out bank details. Before he knew it, there was a total of 64,000 in his bank account. The figure was 58, 00O more than he had in the bank account.
Mr. Mitchell looked at the order and realised the cheque had been paid in Ruislip branch of Stantander. This was not abroad as indicated by the customer who was carrying out the fraudulent activities.
In common practice, the business manufactures coffins on demand. But, he decided to wait for the cheque to clear before he can proceed with the offer.
Mr Mitchell contacted a shipping agent who was not ready to take the order. The agent informed Mr. Mitchell the guy had been operating with 40 different names in his fraudulent activities.
The scam is widely used. The fraudster makes overpayment where he will ask the business to refund the overpayment. The refund is usually arranged by the business. In the meantime, the fraudster cancels the cheque which leaves the business with no money. The scam makes many businesses believe it is genuine but it easily leaves businesses with no money.
Mr. Mitchell is a single man who checks all the business transaction of his business. This helped him realise the scam early. If he was not careful, he will have lost 64,000 in a simple scam.