Invoice fraud happens when criminals manipulate the payment process by creating fake invoices or altering genuine payment instructions.
Because invoices are such a routine part of doing business, this fraud can be hard to spot. The request looks genuine, the supplier relationship is real, and the amount is often exactly what you'd expect. The difference is where the money ends up — instead of reaching your supplier, it's redirected to an account the criminal controls.
Why it's becoming more common
As commercial relationships move online, invoices arrive by email, documents are stored digitally and approvals happen remotely. This is more efficient, but it also gives criminals more ways to insert themselves into a real conversation.
Payment teams process invoices every day. A fraudster's goal isn't to stand out — it's to make a fake request look completely ordinary.
How it happens
Sometimes a fraudster compromises a supplier's mailbox and quietly watches communications for a while. In other cases, a fake or lookalike domain is used to impersonate the supplier. Either way, the fraudster waits until an invoice is expected, then introduces updated payment details. The invoice itself may be genuine — the bank account isn't.
Warning signs to watch for
Invoice fraud is often built on small, easy-to-miss changes:
- A supplier suddenly asks for a different bank account
- The payment needs to be made urgently
- The change is only communicated by email
- Normal verification steps are discouraged or waved away
These details might seem minor, but they should always prompt extra checks.
Building stronger controls
The best protection is a consistent process for payment changes. However urgent a request feels, verify it independently using contact details you already hold — not the ones given in the request. Fraudsters rely on exceptions to your process; strong, consistent controls make those exceptions harder to exploit.
Key takeaway
A genuine supplier and a genuine invoice don't guarantee genuine payment instructions. Always verify changes independently.
Related articles
- What is business email compromise (BEC)?
- What is supplier fraud?
- What is CEO fraud?
- How can businesses protect themselves from payment fraud?