House buyers and businesses warned of payment diversion fraud

26 Oct 2021 12:23 PM

The National Economic Crime Centre has launched a campaign aimed at raising awareness of payment diversion fraud (PDF).

Working with partners in the National Crime Agency, City of London Police, UK Finance and Cifas, the multi-agency campaign aims to help small and medium sized businesses and home-buyers protect themselves.

PDF, also known as Business Email Compromise or Mandate Fraud, involves criminals impersonating others, creating or amending invoices and diverting payments to bank accounts under their own control. This can target both businesses and individuals.

Unlike some indiscriminate scams, PDF involves criminals deliberately targeting a specific individual. As a result, individual losses can be significantly higher than for many other types of fraud.

In the year to September 2021 there have been 4,600 cases reported to Action Fraud, with individual losses averaging around £30,000.

Businesses are particularly impacted with annual spikes in these frauds occurring in March and November, timed with financial year-ends.

Jon Shilland, fraud threat lead at the NECC, yesterday said:

“Payment diversion fraud is increasing and it is vital that people are alive to the threat. Small and medium sized businesses are most at risk due to less comprehensive IT security, but these criminals will also target home-buyers due to the scale of the transactions.

“Whenever you are making a payment to a supplier, or to your solicitor in the case of a house purchase, you should be highly suspicious of any change in account details or new instructions. Always check with a trusted known contact, and if you have any doubt do not transfer the money.”

Temporary Detective Inspector Dan Parkinson, from the City of London Police, yesterday said:

“Criminals are experts at impersonating people and organisations so it’s vital that individuals and businesses are aware of the threat of payment diversion fraud, as it could help protect them and their money.

“Criminals will often create fake e-mail addresses which are very similar to genuine business or customer addressees and send over fake invoices to make it more believable – so remember to follow the Take Five to Stop Fraud advice by stopping and thinking before parting with your money or personal information.”

The campaign will work with Federation of Small Businesses and the British Chambers of Commerce to promote advice to businesses, and with the Law Society to highlight the risks to conveyancing.

The following red flags of Payment Diversion Fraud have been identified:

• Have you been asked to urgently process a payment that is large or unusual?
• Have you been asked to change the bank details of an existing supplier or to set up a new supplier?
• Is the language used in the email inconsistent with that of the genuine sender?
• Does the body of the email or email address contain spelling mistakes?

If you have any doubt about the transaction then do not transfer the money.

Businesses and home-buyers are advised to protect themselves by, double-checking the payment request via an additional method using details from another source (such as text message, a phone call or in-person).

If you think you may have already been a victim of Payment Diversion Fraud, act fast. Immediately reporting the incident to your bank and Action Fraud (0300 1234 2040 or www.actionfraud.police.uk) gives you the best chance of recovering your funds. If reporting in Scotland, please contact 101 and your bank.

Further information about Payment Diversion Fraud please visit https://www.actionfraud.police.uk/a-z-of-fraud/payment-diversion-fraud