Invoice Fraud: A Growing Threat to Businesses

Invoice fraud and fake vendor schemes are now among the most prevalent B2B fraud tactics affecting organizations worldwide.

Invoice fraud is where criminals manipulate company bills and statements to steal funds from businesses. This can be perpetrated through phishing scams, email hacking, or exploiting weaknesses in payment approval processes. 

As digital transactions drive all areas of everyday life, fraudsters are leveraging sophisticated techniques, including AI-generated communications, to deceive businesses.

A recent study found that 62% of businesses cite generative AI as a key driver behind the surge in invoice fraud, enabling criminals to create highly convincing fraudulent documents and emails.¹  

How does invoice fraud happen?

Invoice fraud typically takes three main forms:

1. Fake invoices: Fraudsters create counterfeit invoices that appear legitimate, often incorporating company logos, fake addresses, and falsified purchase orders to deceive businesses into making unauthorized payments.
2. Manipulated legitimate invoices: Cybercriminals may gain access to email accounts and alter banking details on authentic invoices, redirecting payments to fraudulent accounts without the business realizing the change.
3. Vendor impersonation: Fraudsters pose as known vendors or suppliers and submit fraudulent invoices for goods or services that were never delivered. They may use deepfake technology or AI-enhanced communications to make their impersonation more convincing.
   

The Rising Threat of Invoice Fraud

Canadians lost a staggering $638 million to fraud in 2024, with total reported losses since 2021 exceeding $2 billion (CAFC). Yet, only 5% to 10% of fraud cases are reported.²

Invoice fraud remains a major risk:

• 52% of Canadian businesses experienced invoice fraud (2020).³
• Only 31% use automated fraud detection, leaving many vulnerable.¹
• 90% lack dedicated fraud prevention teams, relying on accounting staff to detect fraud alongside their regular duties.⁴
  

These gaps highlight the urgent need for stronger fraud prevention measures.

Red Flags: What Should You Watch Out For?

To mitigate the risk of invoice fraud, businesses should be alert to the following warning signs:

• Unexpected Invoice Changes: Always verify any modifications to payment details, particularly if they are unexpected or unconfirmed by official channels.
• Unusual Vendor Requests: Be cautious of invoices from unfamiliar vendors or suppliers that your company has not previously worked with.
• Suspicious Payment Instructions: Scrutinize invoices with urgent or unusual payment requests, especially those that involve changes to banking details.
  

Combating invoice fraud with payment verification solutions

One of the most effective ways to combat invoice fraud is by using a verification system like Symcor’s Payee Verify. Delivered in collaboration with our partner banks, this tool helps businesses authenticate payment details, ensuring they match verified accounts before the transaction is processed. By confirming vendor legitimacy and payment information, businesses can significantly reduce the risk of financial losses.

Concerned about the risk of invoice fraud for your business? Learn about Payee Verify and how it accelerates fraud detection by proactively monitoring transactions. Get in touch with us.

Sources:

1. The Rise in AP Fraud – Frequency, Sophistication, and Impact 
2. Fraud Prevention Month to focus on impersonation fraud, one of the fastest growing forms of fraud - Canada.ca
3. Real-Life Stories of Cyber Crime: Fake Invoicing Scams – Podcast 3 - RBC
4. Two-Thirds of Businesses Blame GenAI for Fraud Surge