Imposter fraud is the most recent attempt of fraudsters to trick businesses out of money. Imposter fraud is when a fraudster poses as a person or an entity that you know. They could pose as an executive of your company, a vendor, or even the IRS!
In these instances the fraudster will most likely contact you by email. The only problem is, the email looks exactly like the one you receive from the person you know, even down to the email signature. When the fraudster is posing as an executive at your company, they will attach an invoice and instruct you to make payments, usually by wire transfer. Most employees would take an email from their CFO or Controller as a direct order and would pay the invoice without any hesitation. This is exactly what these fraudsters want. We have heard from numerous companies in North Carolina that have seen this attempt at fraud. Some have caught on to this fraud before sending money, others unfortunately have not.
When the fraudster is acting as a vendor they will most likely send you a similar email as your vendor would. However, they will request that you change the original vendor’s payment instructions and that you pay the account of their choice. In addition, they may also hack into your email account and find trends of who you do business with. This allows the fraudsters to create fraudulent invoices or payment requests with very subtle differences than the original invoices.
So, how can you reduce this risk?
First of all, you need to alert your employees and tell them to be aware of scams such as these. No payments should leave your office without being approved by multiple people in your office. If something seems odd or off about a request for payment, be sure to discuss the matter first hand with the executive or the vendor in question. This could alleviate any concerns you had and could protect your company against this fraud.
Education is truly the best way to prevent fraud. We must learn from what others have seen in the marketplace in order to create best practices in these kinds of situations. We challenge you to discuss openly any external attempts at fraud that you have seen. Discuss these cases with your friends, at networking events, at chamber meetings, on social media, etc.
To learn more best practices and speak to a team of CPAs that understand how to safeguard your business against fraud. Contact us for your no-cost consultation.