Invoice Fraud

Invoice fraud occurs when a fraudster sends a fraudulent invoice on behalf of a well-known company, such as a telecom provider, or in the name of a supplier from whom you have recently or regularly made purchases. If this invoice is paid, the funds are directed not to the legitimate supplier but to a bank account controlled by the fraudsters. 
 

How Invoice Fraud Works 

Invoice fraud can occur in both physical and digital forms. The fraudulent invoice may be specifically tailored to your business or may take a more general form: 

Physical Form: 
This typically involves a targeted approach. Fraudsters intercept an invoice after it has been sent by post but before it is received by the intended recipient. They then alter the bank details on the invoice and ensure it is delivered with the fraudulent details. 

Digital Form: 
This form of fraud can be either targeted or general: 

• General Form: 
  Fraudsters send bulk fake invoices to random email addresses. These invoices appear to come from well-known and trusted entities, such as telecom providers or government institutions. The amounts are usually relatively small, and the email appears legitimate, increasing the likelihood of recipients paying the invoice, even if they are not customers of the claimed sender. 

• Targeted Form: 
  In this scenario, you receive an invoice that appears to be from a known supplier. The email address from which the invoice is sent closely resembles the genuine email address of that supplier, with minor variations that may go unnoticed. For example, the email might be invoice[@]example.com, where the letter ‘l’ in ‘example’ has been replaced by an uppercase ‘I’. 
  In some cases, fraudsters may even gain access to the supplier's email account, allowing them to send fraudulent invoices from a trusted address. 

Reducing the Risk of Invoice Fraud: Triple Check 

To help recognise fraudulent invoices and protect yourself against invoice fraud, apply the following three checks: 

1. Verify the Order: 
   If you receive an invoice, confirm that you have actually placed an order. If you are unsure, contact the sender to ask why you have received the invoice. Without evidence that you have authorised the delivery of a product or service, you are not obliged to pay the invoice. 

2. Confirm the Order Number: 
   If you have placed an order, check that the order and/or invoice number on the invoice matches the corresponding records in your system. Ensure that a purchase order or order confirmation exists that aligns with the invoice details. 

3. Validate the Bank Account Number: 
   Ensure that the bank account number on the invoice matches the one you have previously used for that supplier. If the account number is different, contact the supplier directly using a phone number from your own records, rather than one listed on the invoice or in the accompanying email, as this may belong to a fraudster. 
    

What to Do If You Have Paid a Fraudulent Invoice 

If you realise you have paid a fraudulent invoice, contact your bank immediately. Once notified, your bank will liaise with the (foreign) bank of the recipient in an effort to secure the funds. Acting quickly is essential. 

Always report invoice fraud. Although identifying foreign fraudsters can be challenging, there are better prospects for recovery if the fraudulent transaction involves a Dutch bank account. In such cases, the Procedure for Obtaining Beneficiary Identification Details in Non-Banking Fraud Cases (PNBF) may be applicable. 

Under this procedure, if you meet the relevant conditions and have reported the fraud, you can request the bank to provide the identity details of the account holder. These details can then be used to initiate a civil legal action to recover your funds.