Scammers have been targeting small business owners through a variety of invoice scams in 2022, according to a new study from Barclays.
In the first three months of 2022, invoice scams have made up more than half (55%) of all claims, with an average loss of £2,100. The amount that’s been stolen has gone up 13% year-on-year.
Business owners beware invoice scams
Businesses are being urged to stay vigilant when paying their bills or changing energy suppliers, as new data from Barclays reveals that in the last three months, fraudsters stole the most money from SMEs through invoice scams.
Invoice scams are when fraudsters divert genuine invoices or payment instructions sent by email, often from a familiar supplier or contact, and send a replica email with the with bank details changed to an account controlled by them. Barclays data has shown that this type of scam accounted for 55%of all money lost by SME clients in the last three months, up six per cent year-on-year, with an average loss of £2,100.
The overall amount stolen from SMEs has gone up 13 per cent over the last year, despite the volume going down, indicating that scammers are succeeding in fewer, higher value scams, and business owners are at risk of making greater losses.
A recent poll of UK businesses reveals that 85% are worried about the effect the upcoming price hikes and increased operating costs will have on their business. More than half (56%) said it will have an impact on their bottom line.
85% said they would be willing to switch to a supplier they haven’t heard of before if they were offering a better price. Barclays is warning business owners to be on their guard as they look to switch suppliers to find the best deal, as fraudsters may impersonate suppliers and provide updated bank details or information for payment.
Whilst invoice scams have been the most profitable for scammers in the last three months, purchase scams, where businesses buy items that do not arrive, were the most common type. This was followed by impersonation scams, where fraudsters pretend to be from trusted organisations.
How to avoid invoice scams
- Do your research – When looking to use a new supplier or purchase from a new seller, make sure you do the relevant background checks. Our research showed that 57 per cent of businesses review overhead costs intermittently throughout the year as they try to keep outgoings down. When considering a new supplier, remember that if a deal seems too good to be true, it probably is.
- Know your suppliers – It can be hard to spot altered emails or invoices, especially if it’s from a familiar supplier. Calling your supplier to check any new or updated bank details could stop your business being scammed. However, always find the number via a separate internet search or your own records to ensure it’s correct. Our research highlighted that 14 per cent of businesses call the number on the invoice to confirm, meaning they could be playing right into the scammer’s hands.
- Links and attachments – If you get an unexpected message or email asking you to follow a link or open an attachment, use a different method to check this before doing anything. Our research highlighted that nearly one in five (19 per cent) open attachments before reading the email, again leaving them open to being targeted.
For more information on how to keep your business safe from fraud or to learn more about how Barclays is supporting small businesses, visit the Barclays Business Health Hub
Joe Cooksey, Head of Business Digital Education at Barclays, said: “Businesses are under a huge amount of pressure at the moment as they prepare for the new financial year and navigate additional challenges wrought by rising costs. We know that fraudsters will be looking to take advantage of busy business owners and will ramp up their efforts.
“Scammers really are social engineers of the highest order, so it’s vital that business owners and their staff remain vigilant, and if doubt, double check with their bank or a source they know is genuine.”
