If you have a business, your business receives invoices for gear you buy, things you rent, and services you contract. Your business produces invoices for services you provide, or products you sell. Your business might get multiple invoices for the same product or service; and If your business does any transactions with the federal, state, or local government you may also receive invoices from these entities.
A financial institution in the United States reported that 60% of all invoices are paid late, and about 20% of these invoices are paid over 14 days late. You are papered over with invoices, you send invoices for your services, and you receive invoices for your services.
Successful businesses can, on average, receive and process 1000 invoices per month.
That’s five invoices per hour!
That’s what scammers count on; your business receives so many invoices that a fake invoice could slip in and get paid.
Scammers create legitimate-looking invoices for products or services your business uses regularly, such as: office supplies, subscription services, domain registrations, and multiple services. The scammers know that the first things to get paid are those that keep your business running.
Often these phony invoices are for small amounts. It might be a $19 monthly charge for an industry magazine subscription; or $29 a month for virus protection; or $49 a month for advertising services.
A single $199 charge to keep your website running is a very common fake invoice because the description of the charge is very legitimate. Some fake invoices may arrive as “Second or Final Notice” to generate a false sense of urgency from your accounts payable team.
The scammer relies on your Accounts Payable (AP) department being severely overworked, understaffed and burnt out. When the invoice is for something critical and doesn’t cost much, your AP may pay first and ask questions later.
Once you pay, the scammer has not only that small charge but all your credit card or banking info. To you it’s a small loss, but multiplied by 1,000 or 10,000 small businesses, and you can see how the scammer is raking in the money…lots of money.
The FBI estimates that in 2018 alone, companies lost $12 billion due to scammers.
No business is safe. Investor and Shark Tank host Barbara Corcoran lost over $388,000 to a scammer. Amazon was defrauded out of $19 million. Google and Facebook were scammed out of a combined $123 million by a fake invoice scammer. And the list continues to grow
Learn the signs of FRAUDULENT BILLING SCAMS. The following guidelines will help you avoid fake or fraudulent invoice scams:
Knowing what to look for is the best way to avoid fraud that will cost your business lots of money. Remember, once you pay that invoice, you may never get your money back.
If your business is targeted by a fake invoice scam, you may wish to contact the following entities: