Construction invoice fraud
According to data from online invoicing firm Tungsten, published in April 2016, UK construction businesses are losing more than £1.8bn from invoice fraud each year.
One in six construction firms believe fraudulent invoices have cost them more than £5,000 in the last year alone, with businesses losing on average £1,948 a year as a result.
The data also revealed that 60% of firms surveyed received a fraudulent or suspicious invoice in the past year, compared with a national average of 47%.
Although the construction companies surveyed expressed more concern than most other industries about the problem, only 11% said they would take action if they received a suspicious invoice. A further 6% of firms would not know what to do if a suspicious invoice was received, while only 54% would contact the police or a similar reporting service.
Fraudsters have been using tactics such as; embedding viruses in email attachments, attaching unknown invoices to an email or via post, making false changes to bank details and sending duplicate invoices.
Commenting on the survey, Tungsten chief executive Richard Hurwitz said:
“Construction firms face all manner of challenges, and it’s telling that cyber crime looms as one of the biggest. It seems particularly prevalent within the construction industry, possibly because many contractors have minimal back office support and therefore it is easier for fraudsters to get away with their tactics.”
In February, the government launched the Joint Fraud Taskforce to tackle fraud, backed by the National Crime Agency, Financial Fraud Action, the Bank of England and the major banks.
Pauline Smith, head of Action Fraud, which acts as the UK’s centre for fraud reporting and internet crime, said incidents of invoice fraud are under-reported, making it difficult to know the true scale of the problem or how it affects construction firms, saying, “It’s important that employees are made aware of invoice scams and are ready to recognise the signs of fraud”.
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