Fraudulent invoices have become increasingly popular among scammers, with an estimated cost to businesses of millions of dollars per year. The perpetrators of these scams disguise the phony invoice to look real by including an account number and addressing the invoice to a principal in the company or someone in your accounting department. Based on company size, they will carefully calculate an amount that is small enough to get paid without arousing suspicion. The scammers rely on careless accounting practices on the part of the recipients, hoping that the fake bill will simply get lumped in with legitimate bills and paid without question.
Another variation on the phony invoice is a solicitation that is designed to look like a bill, in which case it may contain a required legal disclaimer that says in large boldface type: “THIS IS NOT A BILL. THIS IS A SOLICITATION.” If you are deceived into paying for the solicitation, you may never receive the goods and services advertised and will probably have little to no luck in contacting the company, let alone getting them to refund your money.
A common example of this type of deceptive solicitation is phony yellow pages advertising. These solicitations may even include a copy of an actual ad that your company placed in a valid telephone directory, giving you the impression that this is a renewal notice. In addition, since neither “Yellow Pages” nor the “walking fingers” logo were ever trademarked, any company can use them on their materials, making a bogus bill even harder to spot. These fake yellow pages ads often never run, or if they do, they either appear in a directory with a limited circulation or one that goes only to advertisers and other non-traditional markets. In other words, you’re receiving little to no value for your money.
How to Spot a Phony Bill
Always look at bills closely to make sure that you recognize the vendor’s name and that the account number and amount due match your records. You can often recognize phony bills by the conspicuous absence of a telephone number for the vendor. They may contain messages aimed at inducing pressure, such as “Past Due” or “Final Notice”. In addition, there may be a lot of fine print on the back of the bill.
What to Do if You Receive a Fake Bill
If you receive a bogus invoice, post it for your employees so that they can recognize this type of fraud in the future. And be sure to send a copy of the bill to your Postal Inspector so that they can investigate the matter.