How to protect your hair & beauty business from invoice fraud
Invoice fraud cost businesses £93 million in 2018 according to a survey by UK Finance. Meanwhile new research by Barclays Bank found that one in seven UK SMEs paid fake invoices in the last year. Of these, a quarter of the small businesses said they lost more than £5,000.
Now the National Hairdressers Federation (NHF) has warned that, as a sole trader or small business, freelance hair and beauty professionals and salons are particularly vulnerable to fraudsters. Here’s all you need to know about invoice fraud and protecting your money.
What is invoice fraud?
Invoice fraud is when criminals pose as one of your normal suppliers and ask for their bank details to be changed. They then ask for payments to be transferred over to their new account.
The scam is often only discovered when the real suppliers start asking why they haven’t been paid.
According to the UK Finance survey of 1,500 UK businesses, only half (55%) of sole traders and 68% of small businesses were aware of the threat of invoice fraud.
“Make sure whoever pays the invoices knows about invoice fraud and what to look out for. If you’re ever in doubt, don’t pay.”
How can I identify invoice fraud?
Be wary of any email, letter or phone call asking you to change the way you pay a supplier. If this does happen, check with the supplier using the contact details you have on file for them. Never click any link or use any contact information supplied within the suspicious message.
There are lots of warning signs of invoice fraud, including:
- How often you’re receiving invoices from a supplier. Scammers are likely to send bills more often than real suppliers. If you’re ever in doubt, get in touch with your supplier.
- Invoices that arrive without purchase order numbers.
- Printed invoices looking a bit blurred - this could be because they’re scanned and altered copies from an original document.
- A small change in email address from the ‘supplier’. It may look identical but end with ‘.org’ instead of ‘.com’ for example.
How can I avoid being scammed?
Make sure whoever pays the invoices knows about invoice fraud and what to look out for. If you’re ever in doubt, don’t pay. Instead, get in touch with your supplier using the existing contact details you have, not the email, number or address in any new invoices.
It’s also a good idea to set up a process of emailing a supplier after each payment, letting them know their money is on its way and the account details it’s being paid into. That way if they don’t receive their fee, you’ll know very quickly if you’ve been scammed.
Also if you’re making a payment into a new account for the first time, transfer a small amount of money over first and check with the supplier (using the contact details you have on file) that they’ve received it.
What can I do if I fall for a scam?
If you have fallen victim to invoice fraud, or any other kind of scam, the very first thing you should do is contact your bank. They will be able to tell you what steps to take and might even be able to help you retrieve the stolen money.
Have you fallen victim to invoice fraud?
Have you experienced invoice fraud, or any other scam? Share your experience on our Facebook page, @SalonServicesUK.
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