Invoice fraud costing SMEs over £9 billion a year

posted by 4 years ago in News
Invoice fraud costing SMEs over £9bn a year

The statistic has been uncovered in new research which has also revealed that of those affected, one in six SME companies believe the fraud has cost them more than £5,000 over the course of a year.

False changes to bank details, viruses embedded in attachments, duplicate and unknown invoices attached to emails are all tactics said to be being employed by fraudsters in the crime that amounts to £1,658 per SME.

1,000 companies were surveyed in the research commissioned by Tungsten and nearly half (47%) said they’d received a fraudulent or suspicious invoice in the last year. More than half of the business asked said they viewed invoice fraud as their single biggest threat ranking it above losing a major contract, a member of staff or competitor activities.

Perhaps more worryingly only 44% of businesses would contact the police or a reporting service if they received a suspicious invoice and 13% of micro businesses said they wouldn’t know what to do.

Richard Hurwitz, CEO at Tungsten, comments:

“UK SMEs face all manner of challenges, and it’s telling that cyber crime looms as one of the biggest. What’s most troubling is that it needn’t be like this as there are steps companies can take to protect themselves. Technology such as electronic invoicing can help battle invoice fraud as only confirmed suppliers can upload their invoices and then these are validated before they are paid, potentially saving firms thousands of pounds. Tungsten currently handles more than 15 million invoices a year, with firms in 192 countries around the world transacting across the network.”

The research is released as the Government added their weight to combat the fraud by launching a new taskforce earlier this year.  The Joint Fraud Taskforce will consist of representatives from the City of London Police, National Crime Agency, Financial Fraud Action UK, the Bank of England, and chief executives of the major banks.

Pauline Smith, Head of Action Fraud, the UK’s national centre for reporting fraud and internet crime, said:

“It is important that employees are made aware of invoice scams and are ready to recognise the signs of fraud. Incidents of invoice fraud are underreported and therefore it is difficult to know the true scale of this fraud type. However what we do know is that this type of fraud prevails across all types of business and no one type of industry is immune. Those organisations that are worried they may fallen victim to fraudsters should always report to Action Fraud.”