Scammed Company Ordered to Pay $190k for Fraudulent Invoice Payment

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A hacker gained access to Mobius Group’s email system and sent instructions from a legitimate email address, directing payments to a fraudulent account. Now, a Western Australian court has ruled that Inoteq Pty Ltd must pay Mobius $191,859, plus six percent annual interest, to cover the loss caused by the scam.

The incident occurred in 2022 when hackers sent fake bank details to Inoteq, claiming payment instructions had changed. Inoteq attempted to verify the changes by phone but could not reach Mobius. After receiving fraudulent proof of the update, Inoteq transferred the funds. The scam was uncovered only when Mobius followed up on the unpaid invoice, by which time most of the money had been sent overseas.

Inoteq argued it should not be held liable because Mobius failed to secure its email system. However, District Court Judge Gary Massey disagreed. He ruled that Inoteq’s verification steps were inadequate. “The telephone call was inadequate in all the circumstances and should have prompted a subsequent telephone call,” Judge Massey stated. The court found that Inoteq could have avoided the loss with stronger precautions.

False billing scams are increasingly common. The Australian Competition and Consumer Commission (ACCC) reported nearly 40,000 cases in 2023, up from 13,120 in 2020. Legal experts say this case highlights the need for businesses to strengthen payment processes and contractual terms. “Companies will now need to specify payment account details in contracts and ensure any changes are rigorously verified,” said commercial lawyer Marcus Ahern.

Andrew Bower, a commercial disputes specialist, noted the unique nature of this case. The fraudulent instructions came from a legitimate but compromised email address. “This decision is likely to influence future rulings nationwide,” he said, stressing the importance of thorough verification calls before processing large payments.

With governments drafting new scam protection laws, this case serves as a warning to businesses. Companies must bolster their defenses to avoid similar costly mistakes.

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