The business email scam can take many forms, often leading to a company receiving a seemingly legitimate invoice from a seemingly legitimate supplier. Authorities in the U.S. and U.K. have warned against the cybercrime, which causes businesses to send payment to a fake supplier account.
New data released from the U.K. suggests that this crime may be more common than some businesses think.
According to Wednesday (Dec. 2) reports, one-fifth of U.K. businesses have received a fake invoice. The figure was released by expense management firm Concur in a survey conducted by Vanson Bourne, reports said.
In questioning 500 businesses across the country, researchers found that 3 percent of respondents said they have actually paid a fake invoice; twenty-one percent, meanwhile, have received an invoice but never paid the bill.
The statistics may be startling to some, but according to Concur, just one-fifth of businesses surveyed said fraud is a concern.
“The question for me is, if only 3 percent know they’ve paid a fraudulent invoice, how many more companies have absolutely no idea and have paid, or indeed are still paying, fraudulent invoices?” asked Concur U.K. Managing Director of Enterprise Chris Baker.
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He added that the cost of paying a fraudulent invoice could be permanent and go far beyond financial losses. “Once companies have paid the invoice, there is little hope of getting the money back,” he said. “But it’s not just about the initial outlay. Businesses will be falsely reclaiming VAT and are at risk of penalties, plus investigation if HMRC deems that their processes are at risk.”
Baker highlighted the overarching sentiment among business owners that such fraudulent practices happen: “It won’t happen to us.”
But manual invoice processes, he said, raise the risk of fraud and allow criminals to take advantage of security holes in the AP department.
It’s not just fraudulent invoices that are a problem for U.K. businesses, either. According to Concur’s research, one-third of companies said they are aware they have paid a duplicate invoice. When a company has between 1,000 and 2,999 employees, that figure rises to 59 percent of businesses, leading to money unnecessarily lost, the company said.
Researchers also found that invoices are not always sent to the same place within an organization, and as a company gets bigger, this problem grows larger, too.
“As it stands, companies don’t have the transparency needed to join the dots across the invoice function,” Baker said. “The research demonstrates that this has very real and potentially costly ramifications.”