Farmer Falls Victim to Sophisticated Invoice Fraud, Losing Thousands

Farmer Alan Steven had no reason to question the authenticity of invoices he received from his suppliers. They appeared identical to his usual emailed invoices, with the sole distinction being altered bank details at the bottom. Mr. Steven, who operates a farm near St Andrews in Fife, proceeded to pay £12,000 to a building contractor and £16,000 to a grain merchant. He only became aware he had been targeted by an elaborate fraud when one of his legitimate suppliers contacted him regarding an outstanding payment. The fraudsters had gained unauthorized access to his email account, duplicated genuine invoices, and then substituted their own banking information. “We’re working with a new contractor for some concreting in the yard and building works,” Alan said, adding that he’d received an email asking him to pay so the contractor could buy materials.”That was £12,000. The quote all looks the same, but they’ve changed the bank details at the bottom,” he said. Mr. Steven, whose family cultivates a diverse range of crops from brussels sprouts to wheat, stated: “It’s like anyone farming, you’re doing something outside, then you’ve got a bit of time. I need to pay some bills. I want this work done.“I’m not technically savvy. We’re pressurised. We’re not office people. Just ourselves doing admins.”” Although Mr. Steven managed to recover a portion of the funds by contacting his bank and filing an insurance claim, he ultimately incurred a loss of £16,000. “Completely gutted,” he said. “You’re out of pocket. You’re never going to see that money back again. Basically, it was the equivalent of your year’s wages you’ve lost.“I’ve suffered from depression in the past, and obviously, you know you’re trying to be positive. But you can’t just forget about it.”” Countryfile has been investigating the scams that target farming communities for the BBC’s Scam Safe Week. Mr. Steven’s experience with fraudulent invoices is not unique. Last year, approximately £50 million was lost to invoice scammers, with 80% of these fraudulent activities originating via email. While precise figures for invoice fraud specifically within the farming community are unavailable, Countryfile requested Action Fraud, the national fraud reporting centre, to cross-reference their most recent reports for scams involving farms and invoices. In 2022, 35 such incidents were recorded, rising to 54 in 2023 – an increase of more than 50%. These statistics align with observations made by agricultural insurer Kyle Lomas, who notes a growing incidence of farmers falling victim to scams. Historically, only 1% to 2% of all claims related to fraud were paid. “In the last two to three years, we’ve seen that go threefold, so we’re now paying 9% to 10%,” he said. He believes the operational scale of many farms contributes to their increased vulnerability. “It’s a lot of one-man bands and they’re having to farm,” he said. “They’ve got so many pressures on. “You know, farming covers so much, and then to be an IT savvy person on the internet is probably maybe a stretch.”” He cautioned that the repercussions of falling victim to a scam can be substantial. “The sums can run into tens of thousands in one transaction,” he said. “So that’s how serious it could be.”Some farms only make £10 -20,000 profit in a year. So that can wipe out the whole profit for a number of years for a farmer and could be the end of that farm.”” Rob Alderson also experienced a similar incident during a particularly demanding period. His family has operated a farm spanning 420 acres, cultivating arable crops and raising livestock, near Ludlow in Shropshire for over a century. “It was at the peak of harvest,” Rob said. “I had a busy day, sat down, looked on the internet, I spotted on the Facebook page there was a machine which I thought, if I can get that down here, that will help me this autumn with the loading of the grain. “The price was very much middle of the road. We’re talking between £6,000 or £7,000 pounds.” The vendor appeared credible, providing photographs and a video, and asserted the vehicle was located in Scotland. Mr. Alderson was unable to allocate the time required to travel such a distance for an inspection. “The questions I was asking him, it was leading me to believe he was looking at the machine outside his office,” he said. “I was hooked.” Immediately after he transferred £6,200, the fraudster vanished. Mr. Alderson ultimately recovered his funds from his bank. “It was embarrassing, and then it becomes depressing,” he said. “You’ve just given a quantity of money to somebody you don’t know, and you’ve got nothing back in return.” A recent inquiry conducted by TSB revealed that over one-third of listings on Facebook Marketplace might be fraudulent, with the projected yearly financial loss to consumers approaching £60 million. Countryfile also conducted its own investigation, promptly discovering numerous questionable advertisements on Facebook Marketplace. The program responded to one such ad, which purported to offer a small tractor for £4,400. It was swiftly determined that the images used in the Facebook advertisement had been sourced from a legitimate listing by a reputable farm machinery dealer. This dealer was advertising the same tractor for a significantly more realistic price of £23,250 and verified that the vehicle was still in their possession. Upon making contact with the fraudsters, they redirected the communication from Facebook to an email address. The scammers informed Countryfile that an inspection of the vehicle was not possible as it was stored in a warehouse. They claimed that upon payment via bank transfer, the tractor would be couriered, and a five-day period would be provided for a change of mind with a full refund. The address provided was located within a secure section of a docks complex, preventing in-person verification. Furthermore, they had appropriated the name of an authentic company and established a counterfeit website using that identity. When confronted with evidence during a phone call, they consistently refuted accusations of being scammers. Meta, the parent company of Facebook, did not provide a response to a BBC inquiry for comment. Arun Chauhan, a lawyer specializing in fraud, was consulted regarding the organized groups orchestrating these types of scams. He remarked: “If you think about it, this is a business profession. You have organised crime gangs.”You have people who just spend their entire day honing their skills on how to dupe people.”And when they know that a method is working, they’re just going to keep perpetrating it, and others will jump on that bandwagon as well.”” Chauhan stated that fraud or cybercrime accounts for 40% of all criminal activity in the UK, yet only 1% of the policing budget is allocated to combating it, a situation he believes requires alteration. Dr. Kreseda Smith, a rural criminologist affiliated with Harper Adams University in Shropshire, has examined the effects that scams can have on farmers. She noted, “Research that I’ve done in the past with farmers, looking at how crime affects their mental health, has indicated that this can range anything from anxiety, paranoia, lack of sleep, right through to the extremes of suicidal behaviour.” “It’s important not to think that you’re an idiot for falling for this. Criminals are clever, and some of the scams they perpetrate are slick.” She added, “Criminals have a good idea of the agricultural calendar. So they know harvest time is a great time to try.” She further observed that the perpetrators of these scams rapidly adjust their methods. “The recent Budget is very front and centre of farmers minds at the moment, and I think criminals are aware of that,” she stated. “And I think this whole issue around inheritance tax may raise the opportunity for criminals to perpetrate some kind of scam, whether it’s a way of helping farmers to reduce their liabilities, or some other form. That is a potential.” Countryfile is scheduled for broadcast on BBC One at 17.20 and will also be accessible on the iPlayer. Copyright 2024 BBC. All rights reserved. The BBC disclaims responsibility for the content of external sites. Information regarding their approach to external linking is available.