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September 26, 2018updated 28 Sep 2018 11:58am

UK Finance targets invoice fraud in latest report

A UK Finance report has focused on invoice fraud as a major continuing threat to businesses.

By Christopher Marchant

A UK Finance report has highlighted on invoice fraud as a major continuing threat to businesses.

Invoice fraud can be defined as when a company or organisation is duped into changing bank account payee details for payment. The criminal will pose as a regular supplier to the company or organisation and will make a formal request for bank account details to be changed.

UK Finance says in the first six months of 2018 there were 2,856 cases of invoice and mandate fraud, totalling £49.3m (€55.2m) that was stolen from businesses by scammers. The average amount of money stolen through such scams was £17,262.

Another scam affecting businesses highlighted in the report is known as “CEO fraud”. Here a victim attempts to make a payment to a legitimate payee, but the scammer manages to intervene by impersonating the chief executive officer of the victim’s organisation to convince them to redirect the payment to the scammer’s account.

The criminal will either access the company’s email system or use spoofing software to email a member of the finance team with what appears to be a genuine email from the chief executive, with a request to change payment details or make an urgent payment to a new account. While this type of fraud had the lowest number of cases recorded by UK Finance, it had the highest average amount stolen at £23,055 per case.

In total, the report showed that criminals stole £500m through fraud and scams in the first half of 2018.

In the retail banking sector there was a total of 3,866 reported cases of impersonation scams in the first six months of 2018. The nature of these scams means the victim is often persuaded to transfer a significant sum, with an average loss in a police and bank impersonation scam of £11,402 and in other impersonation scams of £7,504.

Katy Worobec, managing director of economic crime at UK Finance, said: “The finance industry is committed to fighting back, investing millions in security systems and cyber defences to protect customers.

“We have brought in new standards to ensure scam victims get the help they need from their payments provider; we are supporting law enforcement in disrupting the criminals and freezing stolen money; and we are assisting the government in improving intelligence sharing to extinguish the threat.”

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