Experian launches invoice fraud protection tool

Regulation treasurers

Experian has launched a tool which the information services group says will assist UK businesses in countering the growing problem of invoice fraud.

“Impacting businesses of all sizes, invoice fraud is said to have totalled US$215m across 45 nations in the 14 months to December 2014” the group noted, citing data from the US Federal Bureau of Investigation (FBI).

Separate data for the UK show 749 businesses reporting invoice fraud to the UK national reporting centre Action Fraud in the first six months of 2015, compared to 603 in the whole of 2014.

Invoice fraud occurs when criminals impersonate genuine business suppliers and deceive companies into making payments to a fraudulent account. It is a particular problem where there is a high volume of payments, or the payments are of high value.

Experian’s tool, named Bank Wizard Absolute, assists companies in checking that they are making payments to genuine businesses, by verifying the account information before payments are made. It confirms the link between businesses and the current accounts they hold, by comparing the bank account information provided by the business with records held by Experian, in real time.

“Invoice fraud has become a sophisticated enterprise, so spotting it before it happens is a significant challenge,” said Jonathan Williams, director of strategic development at Experian.

“Official statistics give an idea of the pace at which it is increasing among small and medium enterprises (SMEs). The industry feedback we’ve had, however, suggests that it exists on a much bigger scale, affecting a far wider range of organisations and potentially costing UK businesses in the range of hundreds of millions.

“Electronically checking the ownership of UK business bank accounts is a new approach which could revolutionise how businesses set up and pay other businesses, as well as protect themselves from significant losses and damage to their supplier relationships.”

Other facilities offered by Bank Wizard Absolute include help in addressing the issue of payment failure. This is when incorrect information is entered on a system as a result of human error and payments are made into an incorrect account. This often incurs late payment penalties, but the damage to the relationship between a business and its stakeholders can be highly detrimental.

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