Fraudulent Billing and Fraud Prevention Policy

Company: [Company Name] · Effective Date: [Date]

Purpose

This policy establishes controls to prevent, detect, and respond to fraudulent billing and other financial fraud affecting [Company Name].

Segregation of Duties

No single employee has sole control over an entire financial transaction — the person who approves a payment is different from the person who processes it, and both are different from whoever reconciles the account.

Vendor Verification

New vendors are verified before payment (confirming legitimate business existence and banking details via a callback to a known, independently-verified phone number — never a number provided in an unsolicited payment-change request).

Red Flags for Billing Fraud

Employees are trained to recognize: duplicate invoice numbers, invoices from unfamiliar vendors, urgent/unusual payment requests bypassing normal approval, and last-minute changes to vendor banking details.

Reporting Suspected Fraud

Any employee who suspects fraudulent billing or financial misconduct should report it immediately to [Finance/Compliance Contact/anonymous hotline], without fear of retaliation.

Investigation

Reports are investigated promptly and confidentially by [Role/Committee], with findings reported to [Leadership/Audit Committee].

Recovery

[Company Name] will pursue recovery of fraudulently obtained funds where possible and will refer confirmed fraud to law enforcement as appropriate.

Adopted by: ______________________ Date: ____________

*Business email compromise — a fraudulent vendor "changing" their bank details via a convincing email — is now one of the most common and costly forms of billing fraud; the vendor-verification callback rule (using a number you already had on file, not one in the email) is the single most effective defense against it.*