Guide for Schools: Preventing Invoice Scams in your Education Institution - Scam Awareness Week

Accounts payable scam endeavors have been on the steady incline since the COVID-19 pandemic began in 2020. With scammers growing in numbers and knowledge, the damages were unforeseen. The 2021 targeting scams report produced by the ACCC's Scamwatch showed an immense total of $701 Million lost to investment scams as well as another $142 million lost to payment redirection scams. But how are fraudsters targeting your accounts payable processes? And what can we do to prevent them? In this article, we’ll cover  how your education institution could be at risk, current scam tactics and how technology can aid in protecting your institution from fraud and scam threats.

How phishing scams could be a threat to your institution

In 2021, there were 286,622 reports of financial losses to scamwatch, these numbers are only growing. There are a multitude of reasons why schools may be exposed to one of these fraud attempts. It has been reported that 67% of accounts payable fraud is committed by business insiders, this is due to insufficient verification processes in place.  

False billing scams on the other hand, target reception staff and accounts staff. This occurs when a scammer targets your education institution and begins sending phishing emails which are hacking attempts and payment redirection attempts. As of the 4th of July 2021, the ACCC’s Scamwatch reported that there was a 77% increase of payment redirection scams and further attempts. It has also been shown that scammers target smaller businesses such as private schools and small education institutions, due to smaller institutions having lesser security measures in comparison to larger schools.  

Tactics

In 2022, there are various tactics used to commit accounts payable fraud, but what are these tactics and how are they carried out? A commonly used accounts payable fraud attempt is phishing emails, these emails contain a convincing and almost identical false invoice, letter or link posing as a reputable company, supplier, or stakeholder.

Once phishing attempts have been successful, the hacker may be able to access your school management systems, finance system or other internal systems. Once gaining access to your systems, the scammer will be able to access your sensitive data and pose as one of your internal stakeholders, they will provide you with false invoices and account details which could cost your school thousands of dollars. This scam is typically not detected until the official supplier invoice has not yet been paid.  

Due to recent data breaches targeting large Australian cooperations such as Optus, Medibank, and Telstra. The Labor government announced a new budget to combat scams threatening the Australian economy. $12.6m of the 2022 budget will be committed to combat scams and online fraud. This budget is based on a 4-year plan aiming to protect Australians from financial harm as scams alone cost Australia over 2 billion dollars in 2021.  

Education Institutions combating scam threats should consider technology with these capabilities

Protecting your school from scam and fraud attempts doesn’t have to be hard, we recommend considering a solution that offers the following capabilities to ensure the safety of your data.  

• Business number validation - make automated checks against business master records to ensure supplier validity.
• Internal supplier details validations – Automatically check whether the supplier details on the invoice match the master supplier records.
• Duplicate checks - Automatically make sure the received invoice is unique.
• Purchase order matching – Automatically identify whether the invoice references a purchase order, and whether the supplier and purchase details match what it is on the invoice and automatically import the PO approval if it matches.
• Bank account verification – Automatically validate that the bank account listed on the invoice matches the one in supplier records.

Alii ensures that technology can meet and exceed security and protection requirements. Preventing fraud, automating and streamlining your accounts payable processes. Alii ensures that your digital transformation journey will keep your school protected and agile.  

How Alii can help your school combat scams

With scams on the rise year after year, Alii ensures that your data is in safe hands.  Alii prevents scams by running our proprietary fraud detection engine which has the most advanced technology in the industry to date.  

Alii integrates your education institutions management and finance software resulting in a one size fits all platform, streamlining and protecting your AP processes, in addition, Alii stores your internal supplier details and verifications, checking invoices and POs to match master records, ensuring all invoices are valid. Team Alii will continue to provide accounts payable support for schools around Australia for years to come.  

To learn more about how Alii provides fraud prevention and automation solutions for education institutions across Australia, see here.

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