How Minnesota businesses can spot and prevent invoice fraud

Fraud has become increasingly widespread in recent years, present in everything from dating platforms, cryptocurrency, fully automated online businesses and remote work.

One troubling trend targeting small and large businesses alike, though, prompted a Minnesota-based firm that specializes in fraud and forensic accounting to share some safe-guarding strategies

The "invoice doppelgänger" mimics real bills and tricks businesses into paying them. The deceptively simple fraud tactic — executed with a surprising level of sophistication — has cost some companies hundreds of thousands of dollars, if not more.

Intellex Forensics — founded in 2013 with a main office in Eden Prairie as well as locations in Florida — breaks down how to spot the scam and protect your money.

Who's at risk?

The truth is, no business is immune.

"No matter if you're a small startup or a large company, having accounts payable makes you a potential target," Intellex partner Dan Pruett said.

Fraudsters don't need a lot of time or high-level technology to hack in: They simply exploit gaps in the payment process. They often start by sending phishing emails to gain access to your email system. Once they're inside, they gather details about your existing invoices and vendors and use that info to create fake invoices that look almost identical to real ones.

How it works

The scammer creates a fake invoice that looks almost exactly like something you'd expect to see from one of your legitimate suppliers.

They might change the name slightly or tweak the email address just enough to seem believable. They even go so far as to copy logos, project descriptions and formatting; anything to make the invoice seem totally real. The only problem? The payment info goes straight to them, not the vendor.

Despite the rising number of these scams, many businesses still don't have enough checks in place to catch them. Nearly 70% of companies still rely on manual checking methods, such as human callbacks or emails, for bank account validations, per the 2025 Trustpair Fraud Trends and Insights report. Only 31% use an automated account validation tool, while just 8% check supplier credentials across all stages of the procurement process.

Why it's hard to catch

What makes the scheme so easy to miss, per Intellex Managing Director Eric Stephens, is because the pressure is on employees to stop it.

Fraudsters often craft these fake invoices to look like they need to be paid right away, creating a sense of urgency. If an employee feels rushed, they're less likely to scrutinize every little detail. And once the payment goes through, it's often too late to do anything about it.

To make things even trickier, fraudsters often delete or alter emails to cover their tracks. This makes it even harder to figure out where the scam came from or how it started.

How to protect your business

Insulating your company from this starts with a combination of strong security measures, employee training and a healthy dose of skepticism.

• Slow down and double-check: It's tempting to rush through invoices, especially when everyone's busy. But taking an extra few minutes to verify the details can save you from a major headache down the line. Make sure the invoice matches your records, and if something seems off, seek confirmation from the vendor through another communication channel, like a quick phone call or separate email.
• Multiple approvals for larger payments: Set a policy where invoices above a certain total need to go through more than one person before payment. This adds an extra layer of protection and gives another set of eyes a chance to catch anything that doesn't look right.
• Trust your gut: Encourage your accounts payable team to trust their instincts. If an invoice feels a little off — whether it's an odd email address, a last-minute payment request or anything else that doesn't feel right — take the time to verify. It's always better to be cautious than to rush into a payment.

A 2024 survey from software company Medius found 13% of businesses reported attempted invoice fraud last year, with 9% of those scams being successful.

What's at stake?

The Medius survey also reported the cost of invoice fraud can be staggering: On average, U.S. businesses lose about $133,000 per incident.

But the damage doesn't stop there. You'll also have to spend time and money investigating the fraud, and your company's reputation could take a hit as well.

The effects of fraud can ripple out to disrupt relationships with vendors, affect cash flow and even lead to legal or regulatory issues.

"It's not only about losing money," said Isaac Harrill, an associate at Intellex. "The time and energy required to recover can be much more challenging than preventing the fraud initially."

If the unfortunate occurs, and you fall victim to an invoice doppelgänger scheme, don't panic: Contact your bank immediately to try and stop or recover the payment. Notify your internal teams to assess how the breach occurred, often through phishing or compromised email accounts. Inform the legitimate vendor involved and secure any affected systems. Then consider involving fraud experts or checking if your insurance covers financial losses from fraud.

Finally, strengthen your defenses. Some examples: implementing strict verification processes, using automated validation tools, training staff and enabling two-factor authentication.

Bottom line: Prevention is key

Invoice fraud is a serious problem, but it's not something you have to face alone.

"Understanding how these scams work and implementing the right precautions," Stephens said, "can significantly lessen your chances of becoming a victim."

The most important takeaway: stay vigilant. Take your time to verify invoice details, involve multiple people in approving large payments and trust your instincts.

It's always better to be safe than sorry when it comes to invoice fraud.

Claire Fredrickson is the marketing and client relations lead at Intellex Forensics in Eden Prairie. She can be reached at claire.fredrickson@intellexforensics.com or at 612-455-4555.