Invoice Fraud - Did your customer really pay you?

7 minute read

When you carry out work for your customers, you expect to be paid. You call them about the invoice you sent and they said they paid you. Your bank shows no payment. What is going on?

This situation is all to common in business and for the smaller businesses out there, it could make or break a business.

Going back to the start, your business sends out an invoice to the customer. You confirm they received the invoice.

Following on, a week after the invoice is due, you chase the customer in question about the outstanding balance for the work. They say, we paid you last week.



Given the scenario this falls into three possibilities:

Scenario 1 - The customer has not paid you
You confirm the bank details

Scenario 2 - The customer say the bank details are different?
You respond asking why they send the amount elsewhere.

Scenario 3 - The customer forwards you an email that your company sent them previously.
You are now more puzzled about what happened and how to resolve this.

This scenario happens to numerous businesses. As a result, we have a number of safe guards in place.

So what is going on?

This can happen when someone outside your company has access to emails within your company.

What we have seen is when they monitor your emails and wait for a particular time to email customers who recently received an email that your companies bank details have changed.

Some customers are wary of this and call up before paying any invoice. Others may just pay the invoice. You may ask why?

Usually when the customer pays the new bank, they have received an email in similar wording to how you convey an email. The external party who has sent the email has written the email based on recent conversations.

In the case of a customer in Fareham, we had found over 200 emails sent around 07:36 in the morning. This created suspicion as the customers never received emails before 09:00 from this business so many ignored the request.

When this is picked up internally?
If you are using services of Office 365, then safeguards can be placed within the system to alert you of similar activity.

Likewise email tracking, helped determine where these emails came from and which email they were sent from (even when the original emails were deleted).

Had this tracking not been available, checking the sent items would result in no results as the original emails were deleted. A few more services here resulted in tracking the individuals.

Was this crime international?
In this case, it was from the UK. However we have seen similar activity from US, Germany, China and India. No country is exempt. Where money is involved, someone will be eager to find new ways to defraud you.

Is the cloud safe?
Moving your email away from the cloud will not help your business work externally with other businesses. As a result, email is connected globally.

The cloud is only safe if you set it up in a secure manner. One of the simplest changes we recommend is reviewing your passwords with our online tool to see how you can improve your online accounts.

What can I do to protect my business?
Each business is different. There is no one answer for all. We recommend that you have an external audit of your IT and use this to find ways to improve how your business is run. From there, you can then work on the information provided and ensure safeguards are added to protect you and your staff.

As a small business ourself, we don't wish to let any business close down because of financial pressures. Ensure you receive the funds for work you carry out and help more staff grow your business and create a great culture.

An added bonus is that the UK Government wants to help UK businesses with cashflow to help small businesses get paid on time. We welcome this news.

If you would like to discuss your IT Strategy please speak to a member of our team on 01489 290 001. You can also drop us an email.

If you are using Microsoft 365 (previously named Office 365) then ensure you are blocking the ability to forward emails to an outside email address. This ensures emails like invoices don't reach an outside company and helps your business keep the money owed to your business.

If you need to some legal help in this area, please speak to Charlotte and her team at Gerrish Legal.

This post was brought to you by Baldeep on 02 Jul 2019.

Small businesses are often left behind by IT companies as the aim is to work with the larger businesses. Baldeep started the company knowing that IT doesn't have to be your frustration. Provide great solutions at small business budgets is helping companies in Hampshire to focus on their goals without the burden of IT overheads or downtime.

Baldeep continued developing his skillset and has multiple accreditations to his name including his degree, Microsoft Certifications, ITIL and VMware Data Center Virtualization Certification. He is always learning to move IT forward for your business.

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