Learn How You Can Protect Your Business From Vendor Fraud

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?
Call us at 877-448-6500 Opens your phone app..

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?

Email

The fraudster sends an email from an account which may closely resemble the vendor's actual contact.

Phone

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.

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

Stay safe with our tips

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.

Call us: 877-448-6500 Opens your phone app.

Explore more about vendor fraud

Internet Crime Complaint Center Opens in a new window.

Report fraud when it happens and track the latest data on fraud happening across the country.

Federal Trade Commission Cybersecurity for Small Business Opens in a new window.

Report fraud and take steps to keep your personal and financial information safe.

Fraud Prevention Playbook (PDF, 935 KB) Opens in a new window.

Discover common types of fraud that target small- to medium-sized businesses.

Guard your business against vendor fraud

What you need to know

What's vendor fraud?

How does vendor fraud happen?

Warning signs of vendor fraud

Stay safe with our tips

Notice anything suspicious? Let us know.

Explore more about vendor fraud

Continue to Internet Crime Complaint Center site?

Continue to Federal Trade Commission Cybersecurity for Small Business?