The restrictions imposed by the spread of COVID-19 has forced businesses to find new ways of interacting with longtime partners. While the vast majority of business leaders have made the most of the challenge and found ways to deliver the essential services they provide, any chaos on this scale invites a far less scrupulous crowd.
Scammers have found an opportunity to leverage the confusion of the coronavirus pandemic to take advantage of businesses for thousands of dollars. Here is what you need to know about how criminals and opportunists are manipulating the COVID-19 pandemic and what you can do to protect your organization and its cashflow.
Incorrect Invoices Lead to Lost Profit
One of the most common schemes is a form of fraudulent invoicing, especially in the health care industry. Businesses have reported invoices as high as $10,000 or more for services they didn’t purchase or receive. The COVID-19 crisis has created fresh ground for crooks to slip phony invoices past the safeguards most companies have in place to catch them.
It all starts with the restrictions that have been put in place by federal, state and local governments to slow the spread of COVID-19. These include:
- Employees working from home.
- Utilizing unsecure file sharing programs to send data.
- Changes in delivery methods or shipment requirements.
- Use of new digital meeting software.
While these adjustments are necessary to stem the spread of the virus, they have created a disruption for businesses and their accounting departments to navigate. Not only are companies retraining their entire staff for remote work, they also are faced with constantly changing information and making sudden uplanned purchases to adapt to each change of direction. The normal routines are being changed without time to work out the details.
This has led to opportunities for false or overpriced invoices to be sent to businesses in the hopes that discrepancies will be overlooked. These scammers are counting on the chaos of the current situation to keep their fraudulent charges from being noticed for months – if at all.
Counterfeit Government Benefit Scams
As discussed in our recent article about how periods of disruption can threaten your business’ cybersecurity, some scammers take a more direct approach to preying on the accounting office. Multiple ways have been identified for how scammers have utilized the verbiage behind government stimulus programs to take advantage of the crisis.
These scams mimic the language of the stimulus program, using terms such as “economic impact payments” to coerce money out of an organization. While many of these scams have targeted individuals and the $1,200 stimulus checks being sent to taxpayers, others have set their sights on the $349 billion dollars the US government has pledged for small businesses.
Be sure that your accounting department is aware of these risks and knows that no official agency will ever request sensitive business information or an upfront payment. If your company has a loan coming its way, you can expect the government to work with you through official channels to secure the funds.
Use Best Practices and Review All Invoices
The best defense against miscommunication and fraudulent behavior is good accounting practices. Scammers are seeking to take advantage of confusion as companies adjust and the confusion leads to honest mistakes.
In addition to fraud, simple mistakes are likely to be common. Companywide modifications result in invoices changing as services and deliveries adjust. This leads to inaccuracies on invoices. Services that were once unquestionable may no longer be required or even possible to perform. If you are being charged for services you aren’t receiving, then your business is bleeding money during a time when every penny counts the most.
As a result, it is more important than ever that your accounting department knows about all changes to invoicing or service agreements. There should be a list of any modifications to existing agreements alongside a comprehensive overview of any new vendors. Diligent bookkeeping can keep money from ending up in the wrong hands, but only if you get ahead of the problem.
Keep Your Company Safe During COVID-19
As unique as the challenges presented by the coronavirus crisis are, good money management and cybersecurity practices can help safeguard your company.