How Invoice Fraud Works

Invoice fraud is a scam where criminals trick individuals or businesses into paying for fake invoices. Scammers impersonate legitimate companies or service providers, sending seemingly legitimate payment requests.

These fake invoices may be sent via email, letter, or even text message. They claim overdue payments, threaten legal action, or demand immediate payment, forcing victims to pay without inquiring about the invoice's origin.

Once payment is received, the scammers usually disappear without a trace. Sometimes, they use the payment information for identity theft, leading to even greater financial losses.

This scam, often called invoice fraud or billing fraud, is becoming increasingly sophisticated and difficult to detect.

Warning Signs of Invoice Fraud

Identifying online fraud can be challenging. Here are some warning signs to watch out for:

Unsolicited Invoices: Be wary if you receive an unexpected invoice, especially from someone you don't usually deal with. Carefully review the invoice details before making payment.

Unexpected Changes to Payment Information: Scammers may intercept genuine or forged invoices and alter bank information to make transfers. If payment information changes unexpectedly, contact the relevant company directly and provide reliable contact information.

Urgent or Threatening Requests: A common tactic in email invoice scams is to create a sense of urgency. If an invoice requests immediate payment or threatens legal action, read it carefully before replying.

Unusual Payment Methods: Payment requests in the form of gift cards, cryptocurrency, or cash are warning signs. Reputable companies don't request payments this way, but scammers do—this method is very difficult to trace and recover.

Unknown Contacts: Scammers may impersonate well-known brands, business leaders, or trusted suppliers. If you notice anything unusual, trust your instincts and take the time to verify the credentials.

Common Types of Invoice Scams

PayPal Invoice Scams/Intuit Invoice Scams

These scams abuse legitimate platforms like PayPal. Scammers use PayPal's invoicing tool to send seemingly legitimate payment requests. They often include fake customer service contact information in the seller's notes, so victims unknowingly contact the scammers directly when trying to inquire about or cancel the invoice.

Email Invoice Scams

This scam relies on phishing emails that appear to come from reputable companies. Victims receive seemingly legitimate but actually counterfeit invoices. Scammers may forge company email addresses or impersonate company executives, especially when using company email addresses.

Amazon/Apple Invoice Scams

Victims receive fake invoices that appear to be from Amazon or Apple, often for the purchase of expensive items. These fake invoices are designed to deceive victims into believing they have ordered an expensive smartphone, tablet, or desktop computer. These emails may try to trick victims into canceling the order. But this is precisely what tricks them into revealing their bank account or login information to cancel the fake order.

Antivirus Software Invoice Scams

These scams claim that the victim's antivirus software subscription has expired or that their device has been compromised. The fake invoice may contain customer service contact information. However, this information actually leads the victim directly to the scammers. They attempt to trick victims into paying unnecessary fees or installing malware to steal bank information and secure login credentials.