POLICE WARN BUSINESSES: Payment Diversion Fraud Hitting the UK

City of London Police issued a warning yesterday to businesses and the public about the increase in payment diversion fraud. New statistics show more than £101 million was stolen in the last financial year. Businesses remain a key target here, amongst those businesses, the highest number of reports came from the construction industry, with smaller businesses particularly vulnerable due to fewer resources, often less cyber security knowledge and less up to date payment verification processes mainly due to time limitations.

Payment diversion fraud is when con artist encourages a victim to send money to an account they control rather than the intended recipient. This usually happens when fraudsters hacks emails and create convincing impersonation tricks to make a business or individual believe that the intended account cannot accept funds for a specific reason.

Examples of this would be:

·      An email explains, the business you are paying has been compromised due to suffering a fraudulent attack, please pay a different account if you wish to receive your goods. This is a scam.

·       An email explains the business you're paying have changed bank details due to an audit / system upgrade. Please pay the new account. This is a scam.

·       An email explains due to their bank's new increased charging policy they've recently changed, please pay the new account. This is a scam.

Report Fraud received 3657 accounts of Payment Diversion Fraud between 2025 – 2026 financial year. Worryingly, this is a 3% increase.  

I personally know a businesses who has fallen victim to this scam. Luckily the bank was wonderful and stopped the payment due to the speed at which the invoices were questioned after payment was made. This was for the sale of a car internationally from one business to another.

Detective Superintendent Oliver Little, from the Lead Force Operations Room at the City of London Police, said:

"We know criminals are constantly evolving their methods and are increasingly using technology to make their fraud look more convincing. That's why it's vital that any request to change payment details is independently verified before money is transferred."

The City of London Police recommend the following steps:

How to protect yourself from payment diversion fraud 

• Verify: if you receive a request to move money into a new bank account, contact the supplier directly, using established contact details to verify and corroborate the payment request. If you are sending large sums, consider sending a small amount of money first as a test payment and confirm this has been received by the intended recipient before sending the full amount.

  
  

(This is good advice. As a business person, if I send large payments, I always send £1.00 test payment and telephone the business to confirm it has been received before sending a large amount I cannot afford to lose.) Laura – The Scam Hound

• Internal processes: establish robust internal processes for handling changes to payment details. For example, only designated employees should be able to make changes to payment arrangements 

• Sensitive information: invoices, payment mandates, and other documents containing sensitive financial information should be stored securely and only be accessible to those staff that need them to perform their duties. Sensitive documents should be shredded before they are disposed of. 

  
  

What to do if you are a victim of payment diversion fraud 

• If you have made a payment: inform your bank as soon as possible, they can help you prevent any further losses. Monitor your bank statements regularly for any unusual activity. 

• Review: perform a review of your payment processes to ensure all payment requests to a new account are verified and corroborated and existing payments are being made to the correct payee. 

• Identity theft: if you have shared personal or financial information, and suspect your identity may have been stolen, you can check your credit file quickly and easily online. You should do this every few months anyway, using a reputable service provider and follow up on any unexpected or suspicious results. You can also sign up for Cifas services which can help to protect you against fraud 

• You could be targeted again: fraudsters sometimes re-establish contact with previous victims claiming that they can help them recover money, this is just a secondary scam. Hang up on any callers that claim they can get your money back for you. 

Information in this article was sourced from an official press release issued by City of London Police

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