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Fraudsters can target your business by pretending to be a vendor that you work with. You could be sent a fake invoice for payment but never receive the product or service you paid for. Fraudsters may also send a request to update vendor information to send a fake invoice.
Notice suspicious activity on your account?
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What you need to know
- Fraudsters pose as vendors looking to change their address or banking information. They request changes that redirect the payment to the fraudster's account.
- Accounts payable staff are often the targets of vendor fraud.
- You can prevent these scams if your company is aware, organized with the right safeguard steps and follows strict invoicing policies.
What's vendor fraud?
Vendor fraud happens when a fraudster steals from a company for personal gain. They often manipulate a company's accounts payable team to make improper payments to fake vendors. This type of fraud may be committed by an internal employee or by an outside vendor with insider support. Often, small-to-midsize businesses are at greater risk and often targeted since they're less likely to have strict internal controls.
How does vendor fraud happen?
The fraudster sends an email from an account which may closely resemble the vendor's actual contact.
The fraudster calls an individual in accounts payable with the request to change a vendor's address or banking details. They follow up with an email or fax.
The fraudster sends a fax designed to look like the vendor's communications.
Warning signs of vendor fraud
- The vendor uses a PO box mailing address
- Payment requests have no supported documentation
- The vendor claims that a payment was missed and they need it immediately
- The email contains misspellings within the body of the request or in the email address
- You've received duplicate invoices or payment requests on the same date or payment cycle
- You've received an invoice or payment request that's outside of the normal billing cycle
- Invoices are in whole dollar amounts, have no taxes, or include vague or unnecessary services
- There are drastic changes in prices, services or products provided by a vendor than what's been agreed
- Call your vendor at a known number to confirm any payment requests or changes received by email.
- Educate employees about the latest fraud schemes to help provide awareness on vendor fraud. Have safeguards in place to protect your company.
- Search for signs of a potential fraudulent email, which can include grammar and spelling errors, design inconsistencies, suspicious attachments, unusual requests and a sense of urgency.
- Establish official contact methods for your vendor to ensure you're staying safe, such as using specific emails, fax and phone numbers.
- Make sure payment details, such as addresses and banking information, are up to date by contacting vendors on a regular basis.
- Verify the legitimacy of the vendor by doing your own research and ensuring it's an actual business.
Notice anything suspicious? Let us know.
Contact us immediately if you received a suspicious email or notice any unauthorized activity on your account.
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