Fraud Basics

Change-of-banking-details scheme defrauds quietly

Beware fraudsters who want to masquerade as your service providers. They’ll steal purchasing information, change bank account details and trick you into paying them.

Jill is a creditor’s clerk at Organization A in South Africa. It’s month end, and she’s about to process payment of an invoice for Supplier X. She then receives an email from Hugo, the debtor’s administrator in the collections department at Supplier X, who requests payment of the R2 million rand (about US$140,803) invoice into a new bank account. He’s sent an attached confirmation letter for the new bank and other supporting documentation. Jill accepts the information and prepares a payment request for the new bank account.

The next day, the funds transfer into the new bank account. Joey, the debtor’s clerk at Supplier X, calls to say that he hasn’t received payment for services rendered. Jill sends him the proof of payment, but Joey tells her the bank account number is wrong. Jill then sends Joey the email in which the debtor’s administrator at Supplier X supposedly requested the change in banking details. Joey replies that he didn’t send the request. Jill freezes. She realizes she’s been duped.

Organizations need to be aware of this insidious change-of-banking-details fraud when perpetrators assume the identities of legitimate suppliers and divert payments of invoices into their own accounts. They do this by sending forged, altered or manipulated legitimate documents and/or emails that then flow through organizations’ normal payment systems.

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