Invoice and billing scams can be particularly tricky to deal with, as they involve one of the most common and important transactions we’re likely to make. Still, there are ways to try to detect these deceptions and a few options to pursue if you think you’re the victim of fake invoices or bill scams.
“Billing and invoice scams” is a catchall term for a broad category of scams. But essentially, these plots will all target the billing process, attempting to extract money or sensitive information out of businesses or individuals who don’t actually owe anything.
If you run a business, you might receive a message with an invoice attached, supposedly sent for anything from a website domain name extension to advertising services. If you’re an individual, you may encounter a billing scam from the other side, getting a fake invoice from what appears to be a trusted company, supposedly to cover the cost of delivery, order, or even local tax or fee. Any funds sent, however, will go straight to a scammer.
And some scammers are after more than money, using fake invoice attachments as ways to download malware onto your device and steal personal information that may help them steal your identity.
Unfortunately, as options for virtual payments have expanded—including through websites like PayPal and apps like Venmo—so have the number and type of billing and invoice scams. Even small local businesses are no longer immune to the deception.
Source: Best Accounting Software
A 2020 report found that companies lose an average of 5% of revenue each year on billing scams, totaling a staggering $4.5 trillion in losses worldwide, while a 2019 investigation reported that nearly 81% of organizations will be targeted by such deceptions.
Invoice and billing scams can take many different forms, but there are still a few common red flags you can look out for that may tip you off to a problem, including:
If you’re an individual receiving a bill or invoice from what appears to be a trusted company or financial institution, make sure to also look out for:
Since nearly every industry involves billing and invoicing, and nearly every industry today can and does handle those tasks online, there are several ways these scams can manifest.
Billing scams and fake invoices can come from outside or within a company. They can also target businesses or individuals. And, as with all deceptions, scammers are constantly tweaking the formula in hopes of finding new victims.
With these deceptions, scammers often send the “invoice” as an email attachment. Once clicked on, the attachment will download malware onto your device, which can give scammers access to your machines.
A common deception that can come from inside or outside a company, duplicate, and fake invoices are some of the most common versions of this scam.
With duplicate invoices, scammers bill a company twice for the same task, hoping either that no one will notice or attempting to explain away the situation or convince a company the first funds didn’t go through.
Fake invoices are exactly as they sound—bills that are completely made up, for work that was never ordered or performed. Once again, scammers bank on a company not bothering to follow up on whether the claim is legitimate.
More often than not, these types of bill scams come from within a company.
Typically, these deceptions work when a company is billed with a fake invoice. The bills come from a fake company the scammer has created, and the funds they receive are transferred into accounts held by these shell companies.
More like a simple hit and run.
These scams happen when a company is billed by a vendor for a product or service, then, instead of delivering that product or service, the scammer instead runs off with the money, never to return.
On the flip side of the non-delivery fake invoice scam is the online marketplace bill scam.
This can happen when you’re selling something on common websites like Craigslist, Facebook Marketplace, or eBay. A scammer will “purchase” your product, and send you a fake invoice as proof of their payment. Of course, the bill will be a photoshopped fake, but you’ll unfortunately not figure that out until you’ve already shipped out the item.
A step up from the fake invoice scam, these deceptions involve scammers impersonating actual vendors a company may work with.
Depending on the scammer’s amount of inside knowledge, they may even submit bills for work a real company has actually done for their client, making the scam that much harder to detect.
A different type of impersonation, this plot involves scammers presenting themselves as a company’s chief, and ordering “emergency” or urgent payments for certain services.
The fraud emails will direct their recipients to send money to a scam account.
Billing and invoice scams are especially insidious, as they can just as often come from within a company as from outside of it. To that end, when it comes to beating these types of scams, knowledge is power, and a little preparation can go a long way.
When working for a company, you can look out for invoice scams by:
And if you’re an individual receiving an invoice through email, make sure to:
If you think you’re the victim of a billing and invoice scam, there are still a few things you can do.
If you work for a company you believe is being scammed, you can:
If you’re an individual, and you think you got scammed, you should:
If you think you were the victim of an invoice phishing scam, there are a few other precautions you should take, including:
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