Avoiding invoice fraud in the age of AI

Invoice fraud is a deceptive method where scammers send fake or altered invoices to unsuspecting recipients. Designed to appear genuine, these invoices often imitate the look and feel of legitimate payment requests. The goal is straightforward: to trick the recipient into paying for goods or services they never received or into overpaying for those they did.

Fraudsters rarely need sophisticated tools to start exploiting businesses. All it takes is a compromised email account, a forged invoice, or a manipulated PDF attachments of fake contracts or invoices. From there, they use tactics such as:

Business email compromise: Criminals impersonate executives or suppliers to trick employees into approving fraudulent payments.

Invoice tampering: By intercepting or modifying invoices sent via email, fraudsters can change payment details without raising suspicion.

Phishing attacks: Deceptive emails lure employees into sharing login credentials, opening the door to deeper system intrusions.

Duplicate invoicing: A single invoice is sent repeatedly, banking on oversight for multiple payments.

False invoicing: Companies receive invoices for non-existent goods or services.

Traditionally, these attacks have relied heavily on human error. But with AI, things are changing rapidly.

AI has become a powerful driver of innovation for businesses worldwide. But it's also empowering cybercriminals. Today, hackers can purchase AI-powered phishing kits on underground markets, complete with automation and support features that allow even inexperienced criminals to launch sophisticated attacks. For example, AI can generate emails that perfectly mimic the tone and style of a real supplier or executive, making them nearly indistinguishable from genuine communications. It can also analyze stolen data to find the best timing and context for attacks, dramatically increasing success rates.

In other words, fraud is no longer just opportunistic. It's becoming industrialized.

Every organization has vulnerabilities that fraudsters look to exploit. Some of the most common include:

Reliance on email for invoices: PDF invoices sent over email are inherently insecure and can be intercepted, manipulated, or spoofed.

Manual approval processes: Human-based checks are easier to trick, especially when under pressure or time constraints.

Lack of visibility across operations: Fragmented systems make it harder to spot irregularities or unusual payment patterns.

The good news is that there are ways to significantly reduce your exposure to invoice fraud. One impactful measure is the adoption of e invoicing.

As Phil Bailey, Director of Sales Strategy and Execution, explains: 

"When invoices arrive as PDFs via email, they can be easily forged or used in phishing schemes. E invoicing introduces secure, standardized data flows that automate verification steps and greatly diminish the likelihood of fraud, protecting organizations from major global losses."

Adopt e-invoicing as a security measure: E-invoicing isn’t just about automation or complying with legislation, it’s a fundamental upgrade in security. Unlike paper mail or PDFs sent over email or paper, e-invoices are exchanged through secure networks like the Pagero Network. Every step of the process is validated, authenticated, and traceable, making it far harder for fraudsters to tamper with.

Educate your team: Fraud prevention starts with awareness. Regular training helps employees recognize suspicious emails, unexpected or overly urgent requests, and unusual invoice changes.

Strengthen internal controls: Introduce multi-step approval workflows and segregate duties to ensure no single person can authorize critical payments.

Leverage technology: Use fraud detection tools and monitoring systems that can flag irregular transactions before they are processed.

Invoice fraud isn’t going away. In fact, it’s evolving. As AI and automation fuel new types of attacks, businesses must adopt equally advanced defences. That means moving beyond email and PDFs to secure, digital-first processes like e-invoicing.

At Thomson Reuters, we believe security and efficiency should go hand in hand. By shifting to e-invoicing with ONESOURCE Pagero, you’re not only modernizing your financial operations, you’re building a stronger, safer foundation for your business.

This text was originally published 6 November 2020 and last updated 23 March 2026.