Invoice Scams

Invoice Scam on the Rise – Safeguard your Business!

We’ve noticed a disturbing uptick in the number of invoice scams going around at the moment. These scams have been around for a while, but lately they’ve taken on a new momentum. The frightening thing is, they’re getting really hard to spot. We’ve had businesses who have lost huge sums of money come to us for advice, and it’s easy to see how they got taken in. The invoice scam is so advanced, it’s difficult to NOT get taken in! 

Today we want to look at the mechanics of invoice scams, why they’re growing in prevalence and what part AI is playing in this. We also want to highlight any red flags you should look out for, providing you with actionable steps to help protect your business. If you want to avoid the financial and reputational damage an invoice scam can create, read on!  

How Invoice Scams Work 

Invoice scams are also referred to as invoice fraud or payment diversion fraud. They usually rely on exploiting flaws in communication channels and manipulating the trust of the invoice receiver. In this sense, they’re a form of phishing cyber threat.  

The scammers impersonate a legitimate vendor, client or partner, sending you an invoice from an email address in a manner that seems genuine. This is the difficult part to spot – scammers have become so adept at impersonating legitimate organisations. It is difficult to spot the difference, even if the two emails or invoices are looked at side-by-side. Logos, addresses, structure and colour schemes will be nearly identical.  

The catch is the bank details will be to another account belonging to the scammer. Your hard-earned funds will go to them, instead of the creditor you think it’s going to.  

Scammers will improve their chances of success by creating a sense of urgency, threatening a disruption in service if the invoice isn’t paid. Or else promising a discount or special deal if the payment is made quickly! This causes you to rush into making the payment without closely inspecting the invoice for signs of a scam.   

Why Invoice Scams Are Gaining Momentum 

If a scam is proven to work, you can bet your bottom dollar more hackers are going to jump on board with it. People around the world are falling for invoice scams, so more hackers are giving them a go. Here are a bunch of other reasons why invoice scams are becoming more commonplace:  

  1. Easy to Execute: This is a scam that requires little technical expertise when compared to complex cyberattacks. Design skill, a bit of research and attention to detail are enough for the scammers to deceive their targets.
  1. Potential Payoff: A successful invoice scam can yield significant financial gains for a scammer. Think of the size of some of the invoices large corporations deal with – all it takes is one of those to find its way to a scammers account and they’re enjoying huge returns on their efforts.
  1. Blurred Boundaries: We’re in a digital age where businesses interact with numerous vendors and clients online. Trust gets lost in the chaos of multiple invoices from multiple vendors, and it’s difficult to tell the difference between genuine emails or fraudulent ones. These blurred boundaries are what invoice scammers manipulate to their advantage! 
  1. Worldwide Scamming Opportunities: Chances are the hackers behind an invoice scam are in another geographic locality to your business. This makes it easier for them to get away without being apprehended. 

AI’s Role in Strengthening Invoice Scams 

At Smile IT we believe AI is another reason invoice scams are becoming more sophisticated. Hackers are leaning on AI-driven tools to refine their approaches, improve the quality of their scam material and increase the likelihood of success. Here are some reasons how:  

  1. Email Spoofing: AI-powered tools can replicate the writing style of vendors or partners, making scam emails harder to spot. On one scam email we recently encountered, everything was identical to an original email from the company except a slight variation in the shade of the text, and one letter out of place on the delivery address. 
  1. Social Engineering: All that publicly available data that individuals and businesses have out there can be mined by AI and used to build convincing fake personas. Scam emails look like genuine outreach from a party you’re familiar with. 
  1. Timing and Targeting: AI can analyse when a business is most likely to process their invoices, and time the delivery of their scam invoice for maximum impact. 

 Invoice Scam Warning Signs 

Nobody wants to be the victim of an invoice scam. Aside from the obvious financial damages, it can harm your relationship with your creditor and lead to reputational damage that is difficult to recover from. It’s very important you look at all your invoices or payment detail emails through a critical lens, paying particular attention to any of the following red flags:  

  1. Unexpected Changes: An email that advises bank changes or an invoice with updated payment details that weren’t previously communicated should be handled with suspicion. Best practice is to verbally confirm changes like these with your contact at the business supplying the invoice. Double-check anything that looks out of place! 
  1. Urgent Requests: If you feel like an email is pressuring you to act fast, take a step back and think why they might be doing this. Again, verify everything with the business you normally deal with. 
  1. Unusual Communication: Glaring mistakes in the email are a dead giveaway. Look out for spelling errors, grammar mistakes, or poorly worded and unprofessional language. This particular red flag is getting scarcer, thanks to the effectiveness of AI writing bots. 
  1. Unfamiliar Email Addresses: Double-check the sender’s email address against the one you are familiar with. Often the scammer uses a subtle variation that’s hard to notice. It could be a single letter or number out of place. 

Protect Your Business from Invoice Scams 

The above red flags will help you spot an invoice scam, but for full protection, your business will need to adopt a multi-pronged approach. This should include:  

  1. Education and Training: A chain is only as strong as its weakest link, and in many businesses human error is that weak link. Cybersecurity and phishing training should be a regular occurrence in your business, with employees educated on invoice scams as well as all other aspects of cybersecurity. 
  1. Strict Verification Procedures: Implement a two-step verification process for any changes to payment details or large transactions. This could involve confirming a payment via phone or in person.
  1. Email Security: Use email security solutions that can detect and flag suspicious emails. This helps create a buffer that should reduce the likelihood of malicious emails reaching business inboxes.
  1. Regular Audits: Conduct routine audits of your financial transactions to identify any irregularities. Quick detection will prevent further losses and give more credibility to any reports you make to law enforcement or regulators.
  1. Strong Cyber Hygiene: Staying on top of your cyber security is essential. Especially important is keeping your systems and software updated to minimize vulnerabilities scammers could exploit.

Get in Touch with the Brisbane Cybersecurity Experts 

By recognizing warning signs and implementing safeguards, you can help protect your business from falling victim to an invoice scam. It’s a crazy jungle out there when it comes to cybersecurity, with insider threats also on the rise. If you need some help finding your way through it, Smile IT is here for you.   

From phishing and cybersecurity training to backup solutions to helping turn your network into an online fortress, our tech experts have done it all. Get in touch today and we’ll be glad to answer any questions you might have!  

When he’s not writing tech articles or turning IT startups into established and consistent managed service providers, Peter Drummond can be found kitesurfing on the Gold Coast or hanging out with his family!