Invoice fraud is a growing threat, and we want to equip you with the knowledge and tools to combat these cybersecurity criminals. We are seeing it impacting both businesses and personal accounts. It’s crucial to recognize the signs to protect yourself from these attacks.
Understanding Invoice Fraud
Invoice fraud can take many forms, and understanding these tactics is the first step in safeguarding you and your business:
- Social Engineering Customer Service: Imagine a criminal posing as one of your clients calling or emailing your customer service team. They might claim to be new to the role and request old information like account details, a list of past invoices, and billing schedules. This seemingly innocent request can give them the data they need for further manipulation.
- Phishing: Cybersecurity criminals often impersonate legitimate vendors, sending fake invoices with altered bank account details. These emails can look incredibly convincing, making it easy to fall into their trap. Don’t get lazy.
- Invoice Manipulation: Criminals may intercept invoices, alter payment information, and redirect funds to unauthorized accounts. This can happen without any visible signs until it’s too late.
- False Invoices: Fraudsters create fictitious invoices for goods or services never received, attempting to trick businesses into making unnecessary payments. These invoices can be hard to spot, especially if they mimic legitimate invoice formats. Be vigilant and suspicious.
- ACH Changes: Fraudsters may request changes to Automated Clearing House (ACH) payment details, posing as a legitimate vendor or employee. They might provide new bank account information, directing payments to their own accounts. Always verify such requests through a secondary communication channel before making any changes.
Practical Steps to Prevent Invoice Fraud
- Verify Information Thoroughly: Always confirm the authenticity of invoices by cross-referencing them with purchase orders and contracts. Pay special attention to how you received the invoice. A common tactic is to use a spoofed or doppelganger email address. If something feels off, then it probably is.
- Be Suspicious of Urgent Requests: Exercise caution when dealing with invoices that demand immediate payment. Legitimate vendors typically allow for reasonable payment terms. If something feels rushed, it might be a red flag.
- Implement Strong Authentication: Utilize multi-factor authentication (MFA) for online banking and financial transactions to add an extra layer of security. This simple step can make a big difference.
- Regularly Review Invoices: Conduct periodic audits of your financial records to detect any suspicious activity or discrepancies. Double invoicing and mysterious credits or debits could be a criminal probing of your responses.
- Educate Your Staff: Train. Then retrain. Then, continue training your employees to be vigilant about invoice fraud and to report any suspicious activity promptly. Informed awareness is your first line of defense.
- Protect Against ACH Changes: Always verify any requests to change Automated Clearing House (ACH) payment details through a secondary communication channel, such as a phone call to a known contact at the vendor. Implement a policy that requires dual approval for any changes to payment information to ensure accuracy and legitimacy.
Be Dedicated to Security
- Security Awareness Training: Educate your employees on best practices for preventing cyberattacks. Knowledge is power, and we want your team to be well-equipped. There are many companies who provide amazing training, like KnowBe4.
- Threat Detection and Response: Make sure your team monitors your networks, servers, endpoints, and SaaS accounts for signs of suspicious activity and responds swiftly to incidents. Always on guard so you can focus on your business. Companies like Artic Wolf offer great solutions and 24/7 monitoring.
- Risk Assessment and Remediation: You can’t defend what you’re unaware of. Complete a risk assessment to provide a fresh set of eyes on your legacy protocols, identify vulnerabilities, and implement necessary security measures.
- Human Element: Encourage your people to get to know their clients and vendors. Know your reps, and conduct a quarterly check-in call to discuss business and upcoming changes. Put a human face to the name.
- Have a plan –Dealing with cyber threats is real, and having a plan is nonnegotiable. It helps organizations respond quickly when things go wrong, minimizing problems and financial losses and protecting their assets and reputation. You need to prepare for the unexpected because it’s coming.
Business Example
Invoice fraud is a growing threat, and by taking these proactive steps, you can significantly reduce your risk of financial loss. If something doesn’t feel right, trust your instincts and keep asking questions until you’re satisfied with the situation. We’re here to support you every step of the way.
