Avoid summer scammers – checklist to reduce the risk of fraudulent invoices

As the summer season begins, so does the peak season for fraud and fraudulent invoices. With many employees on vacation and hired temporary workers, there are security risks that can unfortunately mean a golden opportunity for fraudsters. Below are some practical tips on what you can do to reduce the risk of being a victim of fraud and what to do if you are affected.

Below you will find Setterwall's complete series of articles on fraud and corporate hijackings that can be useful in the preventive work of protecting your business all year round. Feel free to tip the organization and you will be better prepared for the summer season!

What is a fraudulent invoice?

A fraudulent invoice is an invoice that requires payment for a product or service that the recipient has neither ordered nor received. In some cases, the issuer has had previous contact with you, and sometimes you have had no previous relationship at all. It also happens that companies receive unordered goods sent to them together with a message that the company has committed to payment when it has not previously explicitly objected to the delivery, e.g. by responding negatively to an offer by mail.

For those who have paid a fraudulent invoice, the path to rectification is often expensive. Therefore, do not pay anything and make sure to dispute the invoice correctly.

Five tips to reduce the risk of fraud

1. Review your payment routines. Key personnel and regular staff on vacation can often lead to neglected payment routines. Furthermore, temporary workers often lack experience and knowledge of the routines. Therefore, ensure that the routines are well documented and draw up a list of current suppliers. If an invoice is received from a company other than the one on the list or if a supplier demands payment that deviates from the usual routines, this can be a warning sign..
   
2. Read and check the invoices carefully. Many fraudsters are skilled. For example, the invoice may be identical to the one you usually receive from your regular supplier but with the bank giro number adjusted. Furthermore, an invoice may actually be an offer, but when it is written in small print it can be difficult to understand that it is an offer and not an invoice.
   
3. Take your time for verification. In some cases, the scammer will call and demand that an invoice be paid immediately, e.g. because the due date has already passed. You may also be contacted by new suppliers or contact persons with email addresses that you have not previously been contacted by. In all cases, you should take the time to verify that there is a correct invoice and that it is from the correct sender.
   
4. Do not enter into any agreements over the phone. Make sure all employees and temporary workers know that they should never accept any form of recording or enter into contracts over the phone. Furthermore, to the extent possible, contracts should not be entered into at all during the summer when authorized personnel may be on vacation.
   
5. Dispute the invoice. If you have received a fraudulent invoice, it is important not to be influenced by the issuer's pressure. You should also dispute the invoice as soon as possible. Below we will go over how you can proceed.

Dispute an invoice in three steps:

• Step 1: Object to your payment obligation and document it. Object to your payment obligation by crossing out the invoice and writing ”Object to (dispute) payment liability – we have not ordered the goods/service” or ”Object to (dispute) payment liability due to misleading information” depending on the circumstances. Keep copies of the invoice and your objection.
• Step 2: Send your dispute to the issuer. Send the invoice and your objection back to the issuer via email and request a read receipt, or via registered mail so that the date and time are clear. Save all copies of the correspondence.
• Step 3: Inform Swedish Trade and consider filing a police report. Send a copy of the invoice and correspondence to the Swedish Trade Association. This way, the issuer can be added to the Swedish Trade Association's Warning List, which is a register of fraudulent and fraudulent traders. Also file a police report if deemed warranted.

What should you do if the issuer does not release its claim?

Refer the issuer to take legal action. Do not negotiate. There is no point in discussing with these actors, so do not waste your energy on this. There is no way to stop rogue actors from demanding payment from your company.

Source: Setterwalls Law Firm AB