Fake Invoice Scams
Phone scams cost Americans $1.4 billion in 2024, according to the FTC.
Quick Answer
Fake invoice scams, a form of Business Email Compromise (BEC), tricked businesses and individuals out of more than $2.9 billion in 2023, according to the FBI.
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How It Works
1
A scammer creates a fake invoice that looks like it's from a real vendor, a government agency, or a well-known company. They often use logos, language, and email addresses that are nearly identical to the real ones.
2
The fraudulent invoice is sent, usually via email, to an individual or a company's accounts payable department. The email may claim that the vendor's payment information has changed or create a sense of urgency, threatening penalties for late payment.
3
The victim, believing the invoice is legitimate, pays the bill. The money is sent directly to the scammer's bank account, and is often quickly transferred to make it difficult to recover.
4
The fraud is typically discovered much later when the legitimate vendor inquires about their unpaid, real invoice, by which time the stolen funds are often unrecoverable.
Red Flags
- You receive an unexpected invoice for products or services you never ordered or received.
- A vendor suddenly requests to change their payment information, such as bank account or routing numbers.
- The email address of the sender is slightly different from the legitimate company's domain (e.g., "cocobeans.com" instead of "cocoabeans.com").
- The invoice contains spelling errors, grammatical mistakes, or a low-quality logo.
- There is intense pressure to make the payment immediately, often with threats of fines or service interruptions.
- The invoice amount is unusual, such as a round number when that is not typical for that vendor, or is for a slightly different amount than expected.
What to Do If Targeted
- Do not pay the invoice. Do not click any links, open attachments, or call any phone numbers listed in the suspicious email.
- Contact the vendor directly using a phone number or email address you have on file from previous, legitimate interactions. Do not use the contact information from the suspicious invoice.
- Verbally confirm any requests to change payment information with your established contact at the vendor's company.
- If you have already paid, contact your financial institution immediately to report the fraud and request a stop or reversal of the payment.
- Review all internal invoices and payments for any other unusual activity or changes.
- Educate employees, especially those in finance and accounts payable, on how to spot and handle potential invoice scams.
How to Report It
- FTC — Report the fraud to the Federal Trade Commission, which shares information with over 2,000 law enforcement agencies.
- FBI IC3 — File a complaint with the FBI's Internet Crime Complaint Center (IC3), especially if the scam occurred online or involved email.
- BBB — Report the scam to the Better Business Bureau's Scam Tracker to help warn other businesses and consumers.
- FCC — File a complaint about phone scams, robocalls, or unwanted calls with the Federal Communications Commission.
- AARP Fraud Helpline — Call 877-908-3360 for free support from trained fraud specialists. Available to anyone, not just AARP members.
Key Statistics
- In 2023, the FBI IC3 received 21,489 Business Email Compromise (BEC) complaints, which includes fake invoice scams, with adjusted losses over $2.9 billion. — FBI IC3 2023 Internet Crime Report
- The average cost of a single successful Business Email Compromise (BEC) attack in 2023 was $137,132, an increase from $125,612 the previous year. — FBI IC3 2023 Internet Crime Report
- Email was the number one contact method for scammers in 2023, particularly for those impersonating a business or government agency. — FTC 2023 Consumer Sentinel Network Data Book
- Imposter scams, which include business and government impersonation, were the top fraud category in 2023, with reported losses of $2.7 billion. — FTC 2023 Consumer Sentinel Network Data Book
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Frequently Asked Questions
A fake invoice scam is when a fraudster sends a bogus bill for goods or services that were never ordered or received. The goal is to trick a business or individual into paying money into the scammer's account. This scam is often a type of Business Email Compromise (BEC).
Fake invoice and related Business Email Compromise (BEC) scams are incredibly costly. In 2023, the FBI's Internet Crime Complaint Center (IC3) received 21,489 BEC complaints with adjusted losses exceeding $2.9 billion. The average loss for a successful BEC attack in 2023 was $137,132.
If you paid a fake invoice, you must act immediately. Contact your bank or financial institution to report the fraudulent transaction and see if the payment can be stopped or reversed. You should also report the crime to the FBI at ic3.gov and the FTC at reportfraud.ftc.gov.
To verify an invoice, do not use the contact information provided on the invoice itself. Instead, contact the vendor using a known phone number or email address from your records or their official website. Verbally confirm the invoice details, especially any changes to payment information, with a trusted contact at the company.
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