Mandate Fraud

“Mandate fraud” is when you or an employee is deceived into changing a regular payment mandate (such as direct debit), by purporting to be an organisation you make regular payments to.

As part of International Fraud Awareness Week, this is my second post about common business frauds.

Mandate fraud usually happens by your business being contacted by someone claiming to be an existing supplier and you are told to amend the direct debit instruction to their “new” bank account – which is one controlled by the fraudster. The contact to you by the fraudster can be made directly or by email. You will not suspect fraud until you are contacted by your genuine supplier to say that your monthly payment has not been made, or goods or services are not delivered.

Always verify requests for amended payments to an organisation directly using established contact details. If a call seems suspicious, hang up and call the organisation using established contact details. Make sure colleagues, particularly those in your finance function, are aware of the risks.

Are you going to make your colleagues aware of this fraud?