A scam that targets the accounts payable process directly
Fake invoice scams are one of the more financially damaging forms of fraud small businesses run into, and they don’t rely on hacking anything. Instead, they rely on a convincing document and a normal-looking request slipping through your regular payment process. Knowing what to check catches most of these before money moves.
How the scam typically works
An invoice arrives that looks like it’s from a vendor you actually work with, sometimes because the attacker has compromised that vendor’s email account, sometimes because they’ve simply copied the vendor’s branding and invoice format. The amount is usually close to what you’d normally expect to pay, and the request often includes a note about updated banking details, asking future payments to go to a new account.
Warning signs worth checking every time
| Warning sign | Why it matters |
|---|---|
| A request to update banking or payment details | The single most common thread in these scams |
| An invoice slightly different from the vendor’s usual format | Small formatting inconsistencies are a real signal |
| Pressure to pay quickly or avoid the usual process | Urgency is used to prevent a normal double-check |
| An email address that’s close to, but not exactly, the real one | Easy to miss without a close look |
The one habit that stops most of these
Any request to change payment or banking details should be verified through a separate channel before you act on it, a phone call to a known number for the vendor, not a number listed in the email itself. This single habit, applied consistently, stops the large majority of fake invoice scams, even the convincing ones, because the attacker doesn’t control that separate channel.
Build the check into your process, not into memory
Relying on someone to remember to double-check every time is less reliable than making the double-check part of the actual accounts payable process. A simple rule, any change to vendor payment details requires a phone verification before the next payment goes out, closes the gap regardless of how busy or distracted the person handling payments is that day.
What to do if you catch one
If you identify a fake invoice before paying it, it’s still worth reporting to your bank and, depending on the scope, law enforcement, since the same attacker is very likely targeting other businesses with the same approach. Notifying the vendor whose identity was used is also worth doing, since they may not know their name or branding is being used this way.
If a payment has already gone out
Speed matters. Contact your bank immediately, since a fraudulent wire transfer can sometimes be recalled or frozen if caught within hours rather than days. The longer the delay, the lower the odds of recovering the money, which is exactly why the verification step before payment is worth the extra few minutes.
Want help reviewing your current payment verification process? Get in touch and we’ll help you tighten it up before it becomes a problem.