- Typically, you will receive an email, often followed by a telephone call from the fraudster purporting to be your supplier or contractor. This is often done by mimicking the website and email domains – making the email address appear legitimate. They may even use the supplier or contractor’s logo, taken from their website, to give further credence.
- The email will explain that their account details into which you would ordinarily make payment to them have been changed. They will go on to provide details of a new bank account and ask you to change the payment details to reflect this.
- They may even request for any monies currently outstanding be paid immediately to the new account or they may just wait for future payment.
- You may even ring your supplier or contractor or reply to the email for clarification using the contact details provided in the email.
- If you’re not alert to these risks and fail to conduct proper due diligence corroborative checks, you may fall into the trap of changing the banking mandate as instructed. You may even do as instructed and make immediate payment of any monies owed outstanding as requested.
- Sometime later you are contacted by your legitimate supplier or contractor, querying why the normal payments to them have not yet been received.
As a result, you might look into this and discover fraud has taken place. You should immediately contact your bank to report this.
- Your bank contacts the receiving bank i.e. the one subject of the fraudulent mandate and tries to claw back the fraudulent funds.
- However, it transpires that once received into the recipient bank, a series of immediate electronic transfers were made to a series of multiple other accounts across different banks for much smaller amounts – some of which are offshore.
- Further enquiries reveal the funds have since all been withdrawn and are unrecoverable.
As the funding partner of choice, we work closely with our clients supporting the business in the way they require, but also to ensure both parties are vigilant to frauds such as these. Below you can see the guidance we employ to ensure we, our clients and their suppliers aren’t susceptible to this type of fraud.
- Never respond to telephone calls, emails to change banking mandates from any of your suppliers or contractors etc. without conducting further checks.
- Consider, contractors and suppliers rarely change their banking details given the significant amount of additional administration that goes with it e.g. having to contact all their customers to notify.
- Always conduct further checks to verify the request is legitimate, contact the supplier directly using established contact details you have on file – never those contained in the email without checking first.
- When you are having any renovation work done and regular comings and goings of contractors be particularly alert to this.
- Restrict access to those in your company who have authority to change banking mandates and ensure those who do have this authority are properly trained and alert to the risks of mandate fraud.
- Notify your bank immediately if you think you have been a victim to mandate fraud.