UK financial advisers are losing millions by paying fake invoices to fraudsters posing as legitimate suppliers, UK Finance has found.
The promotional group for the UK’s finance industry is warning financial advisers after it found that nearly £93m ($122m, €108m) was lost to invoice scams in 2018.
This type of fraud happen when criminals trick firms into believing they are regular suppliers and convince them to transfer money.
During 2018, there were nearly 3,300 invoice and mandate scam cases, according to UK Finance – with financial advice firms losing, on average, £28,000 each.
Firms are ‘unaware’
During a recent survey, the promotional group also found that 43% of businesses don’t know of the existence of invoice scams.
Large businesses were more aware of the risks (84%) compared to small businesses (68%) and sole traders (55%).
Smaller firms were also less likely to have experienced invoice fraud, with only 6% of sole traders falling victims, when around 26% of larger firms had been targeted.
However, larger firms were more prompt to take action against these type of scams, with 63% targeting the issue, compared to 47% of small businesses and 14% of sole traders.
How to prevent
International Adviser reached out to the UK’s fraud reporting centre, Action Fraud, which is currently raising awareness of the issue.
“Always verify changes to financial arrangements with the organisation directly using established contact details you have on file,” a spokesperson for Action Fraud told IA.
“If you are concerned about the source of a call, ask the caller to give you a main switchboard number for you to be routed back to them. Alternatively, hang up and call them back using established contact details you have on file.
“Check your bank statements carefully and report anything suspicious to your financial institution,” they added.
Criminals are sophisticated
Katy Worobec, managing director of economic crime at UK Finance, said: “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.
“If someone contacts you asking for a supplier’s bank account details to be changed, always verify with that supplier separately on the phone or in person, using the contact details you have on file.
“If you suspect you’ve fallen victim to fraud, contact your bank immediately and report it to Action Fraud.”
Source: UK Finance
