Vendor & Invoice Fraud

92%

of companies report being hit by targeted email attacks in past year

$12.5 Billion

in reported losses to business email compromise (BEC) in the past 5 years

6.5 Billion

fraudulent emails are sent every day

New risks for controllers

Professional fraud rings are increasingly turning their attention to the accounts payable departments at large enterprises. With even the largest, most sophisticated companies falling victim to fake invoices and vendor fraud, CFOs, controllers, and accounting departments should be on high alert. B2B payments are significantly larger than at B2C companies, technology to enhance identitification of fraudulent invoices and other vendor fraud is less prevalent, and most payment and invoice communications remain stubbornly achored in email, paper and other risky communications methods.

Fraudsters study your organization - they know who your suppliers are.

Your Accounts Payable department is a prime target for fraud. Criminals are looking to take advantage of AP departments which are buried in paperwork to submit fake invoices and have them processed as legitimate.

A single fraudulent invoice might not impact your company too much, but over time invoice fraud can become a costly problem. Stopping invoice fraud is laborious and frustrating, but implementing strict controls and AI assists will significantly reduce the risk of your company falling victim.

How vendor fraud is committed

Fraudsters know you're managing 100K+ vendors, 1MM+ invoices a year, and all by email.

Enterprise fraud and cyber attacks are growing more frequent, sophisticated, destructive, and costly, alarming global investors and c-suite executives alike.

PwC’s 2018 Global Investor Survey found that investors and directors see cyber-attacks, and the fraudulent monetization of the stolen assets, as the biggest threat businesses currently face. In second and third place, over-regulation and terrorism.

The biggest cyber threat facing businesses right now: Phishing. Verizon’s 2018 Data Breach Report found that 90% of cyber-attacks originated with a phishing scheme. Reported losses due to business email compromise (BEC) alone, one highly targeted form of phishing where fraudsters convince unwitting employees to send them sensitive data or wire large sums of money, exceeded $12.5 billion.

The Top 7 Most Common Vendor & Invoice Fraud Methods

Fraudster changes wire/payment instructions for real invoice from a real vendor (via email, social engineering, account takeover, insider assistance, falsified company executive request aka ‘CEO’ fraud, etc)
Fraudster submits a fake invoice from a real vendor
Fraudster sets up fake vendor and submits invoices for services not rendered
Fraudster requests payment of real invoice that has already been paid
(double payment)
An internal employee initiates, facilitates and/or works with the fraudsters to achieve any of the above (insider threat)
Two or more internal employees work together to create and pay falsified invoices (collusion)
Real vendor fabricates information to secure improved terms/position.

Find your anomalies & vendor fraud

unsupervised machine learning for vendor fraud

Know Your Vendor (KYV)

Organizations are challenged on many fronts in their efforts to protect their customers and their businesses against fraud. The increasing growth and complexity of supply chain management leave large enterprises, and the tens or hundreds of thousands of suppliers they manage, vulnerable to cybercriminals and requires that organizations continue to innovate their anti-fraud policies to stay one step ahead.

But once your organization can accurately confirm the identity of your new vendor, its location and other details, its principals and their respective backgrounds, and whether the company, executives and shareholders have a history of honest and legitimate business dealings, the virtuous cycle begins. Use Fraud.net’s proprietary ‘Know Your Vendor (KYV)’ corporate identity services to identify and halt the <1% of fraudulent and high-risk vendors and invoices so that you can focus on growing your enterprise, boosting your profitability, and attracting more high-trust vendors and customers.