How Accounts Payable Software Helps with Fraud Detection
December 1, 2019
By The OneDataSource Team
Between May 2013 and May 2018, scammers targeted more than $12 billion in invoice fraud worldwide, according to the FBI. In a research article on the subject by CNBC, a particularly glaring case involving Google and Facebook is laid out. Here are the bullet points:
- Google paid out $23 million and Facebook paid out $100 million to a single fraudster.
- How did this happen? The technique used was invoice fraud.
Fortunately for Google and Facebook, they’re Google and Facebook – they had the resources to recover the funds. However, for the vast majority of businesses, invoice fraud is a common practice that negatively impacts the bottom line. In fact, OneDataSource’s onePAY application for accounts payable processing recently helped a customer catch and solve for a fraudulent chain of invoices plaguing their restaurant business.
The scheme typically plays out like this…
A fraudster finds some specific information about a company that enables them to generate seemingly accurate invoices. The individual then slips the fraudulent invoices into the payables process to blend among the rest of the actual invoices. The information they acquire to issue these fraudulent invoices are often easy to find – an email address, a site or office address and the name of an employee typically involved in the AP process.
In the case of our customer, the fraudster acquired names and addresses of store managers by calling them, then sending unwanted and unneeded products addressed to the store manager to the customer’s restaurants. The fraudster then submits invoices like a “legitimate” vendor into the payables process. Regardless of the product(s) being illegitimately ordered and sent, the fraudulent vendor would demand payment for products received. In this case, to the tune of roughly $700 per one scam package.
This customer was fortunate to catch this scam, and our accounts payable software helped them do it. Without the right systems in place, this scam could have gone on for months and cost thousands of dollars. The onePAY support team here at OneDataSource also took this information to our network of customers to alert them to be vigilant for similar scams within their accounts payable environments.