Financial fraud is no longer just a “big company” problem. In Singapore — a highly connected, digital-first economy — businesses of every size are targeted by fraudsters using increasingly sophisticated tactics. The scale of the problem is growing rapidly. In 2024, Singapore scam victims lost S$1.1 billion — about a 70% increase over the losses in 2023, when reported scam losses were S$651.8 million. There were 51,501 scam reports in 2024, up from 46,563 in 2023.
Perhaps more chilling for businesses: one large Business Email Compromise (BEC) case alone cost a Singapore commodities company S$57.2 million after fraudsters spoofed a vendor’s payment account details.
These numbers underline that fraud isn’t a fringe threat — it’s a major, systemic risk. Below, we explore the most common fraud types affecting Singaporean businesses, plus what you can do to defend against them.
1. Business Email Compromise (BEC) / Invoice & Payment Fraud
What it is: Fraudsters compromise or spoof legitimate email accounts (often of suppliers, executives, or finance staff) to request urgent changes to payment details or to submit fake invoices. Victims often make large transfers before realizing the request was fraudulent.
Why it’s dangerous in Singapore: BEC has generated significant losses locally; phishing and impersonation remain leading causes of large-dollar fraud in recent years.
Red flags
- Sudden requests to change bank account details with a sense of urgency.
- Emails that look almost correct but have small domain/grammar anomalies.
- Unusual payment timing (weekends, odd hours) or insistence on off-channel confirmation.
How to avoid it
- Require dual approval for invoice changes and high-value payments, with approvals outside email (phone call to a known number or authenticated chat).
- Implement payment “speed bumps”: verification hold periods for new payees and outgoing transfers above thresholds.
- Use email authentication (SPF, DKIM, DMARC) and train staff to recognise spear-phishing.
- Reconcile supplier contact details in a secure directory and validate any change request with the supplier via an independent channel.
2. Impersonation & Social-Engineering Scams (including Government/Bank Impersonation)
What it is: Fraudsters impersonate government officers, bank officials, or known partners to coerce staff into disclosing credentials, authorising payments, or releasing information. These scams often involve convincing scripts, fake documents, or caller ID spoofing.
Scale in Singapore: Government-official impersonation scams and other impersonation types have been among the costliest scams reported in recent years. Authorities have highlighted impersonation scams as a major contributor to losses.
Red flags
- Pressure to act immediately or threats of penalties.
- Requests to divulge credentials, OTPs, or to move funds urgently.
- Caller claims that “we can’t share details online” — use that to verify independently.
How to avoid it
- Teach employees that banks/government agencies will never ask for credentials or OTPs over the phone.
- Maintain an internal verification protocol: any unusual request from a “trusted” party must be validated against an independently sourced phone number or contact.
- Keep an escalation path to senior management for any high-risk request.
3. Asset Misappropriation & Internal Theft
What it is: Employees or contractors divert company assets (cash, inventory, sensitive data) for personal use. This includes skimming, falsified expense claims, payroll fraud, and siphoning receipts.
Why Singapore businesses should care: Internal fraud shows up across industries and is a frequent reason for enforcement or reputational damage; regulators urge stronger fraud risk assessment and controls.
Red flags
- Unexplained inventory shortages, repeated accounting reconciliations, or frequent manual journal entries.
- Employees living beyond visible means, or resistance to audits.
- Multiple small vendor payments that aggregate to large sums.
How to avoid it
- Segregate duties so the same person cannot authorise, process, and reconcile transactions.
- Run surprise reconciliations and independent audits; rotate accounts-responsibility roles.
- Use automated expense-management tools with photo receipts and approval workflows.
- Establish clear whistleblower channels and protect reporters.
4. Fraudulent Suppliers / Fake Companies (Procurement Fraud)
What it is: Fraudsters set up fake suppliers or impersonate real suppliers to invoice companies for goods/services that are never delivered. These schemes often exploit weak vendor onboarding processes.
Red flags
- New suppliers with minimal verification documents.
- Multiple vendor accounts with similar bank details or addresses.
- Invoices for services not requested or duplicate invoices.
How to avoid it
- Implement a strict vendor onboarding process: verify company registration (ACRA) records, directors, GST registration (if applicable), and bank account ownership.
- Cross-check supplier email domains and supplement with KYC checks for high-value vendors.
- Use three-way matching (purchase orders, goods/services received, invoices) before payment.
5. Cyber-Enabled Fraud: Phishing, Malware, Ransomware, and Account Takeovers
What it is: Cyberattacks that lead to financial losses — from credential theft via phishing to ransomware that encrypts systems and demands payment.
Local context: Singapore’s authorities, financial regulators, and telcos have advanced frameworks (such as the Shared Responsibility Framework for phishing and scam mitigation) precisely because cyber-enabled scams have surged and caused significant losses.
Red flags
- Multiple failed logins or logins from unusual geographies.
- Users receiving password-reset emails they did not request.
- Strange system behaviour after opening an email attachment.
How to avoid it
- Enforce strong MFA (multi-factor authentication) for all business accounts and privileged users.
- Keep systems patched, restrict admin rights, and segregate networks.
- Run phishing simulations and security awareness training.
- Maintain tested backups and an incident response plan that includes legal and communications roles.
- Use only legitimate, trusted accounting platforms like Xero instead of pirated or unverified software. Not only do these solutions provide enterprise-grade security and regular updates against vulnerabilities, but they also reduce the risk of malware infections and fraudulent manipulations that often come with illegitimate systems.
6. Financial-Statement Fraud & Cheating (Accounting Manipulation)
What it is: Intentional misstatement of financial reports to mislead stakeholders — e.g., revenue recognition manipulation, fictitious assets, or hiding liabilities. This can lead to criminal charges and severe reputational harm.
Regulatory note: Auditors and regulators in Singapore are increasingly focused on fraud risk assessments and audit quality as a response to evolving fraud schemes; companies should treat this as an organisational risk, not just an accounting issue.
Red flags
- Complex or opaque transactions near reporting dates.
- Significant or unexplained related-party transactions.
- Management override of controls or pressure on finance teams.
How to avoid it
- Strengthen governance: an independent audit committee, a robust internal audit function, and a strong control environment.
- Adopt clear revenue-recognition policies and require documentation for judgments and estimates.
- Encourage an open culture where finance teams can raise concerns without fear.
- Engage a reputed corporate service provider to manage accounting and taxation. Experienced professionals not only ensure compliance with Singapore’s accounting standards but also provide an additional layer of oversight, reducing opportunities for manipulation and fraud.
7. Money Laundering & Third-Party Abuse
What it is: Criminals use legitimate businesses to launder proceeds of crime, for example, by routing illicit funds through shell companies or trading firms.
Why watch for it: Singapore’s anti-money-laundering framework is strict, and penalties can be severe. Businesses should be careful about unusual cash flows or new customer behaviour that doesn’t match the stated profile.
How to avoid it
- Know-your-customer (KYC) checks for significant corporate clients and ongoing transaction monitoring.
- Escalate and report suspicious transactions to the relevant authorities.
- Train sales and finance staff to notice behavioural red flags (e.g., customers reluctant to provide documentation).
Practical Fraud-Prevention Checklist (for Busy Leaders)
- Segregate duties and require dual approvals for payments above a limit.
- Use MFA and enterprise-grade email security (SPF/DKIM/DMARC).
- Maintain a verified supplier directory and run regular vendor reconciliations.
- Run mandatory fraud & phishing awareness training every 6–12 months.
- Keep an internal incident response & fraud reporting plan, with named roles.
- Document critical processes and rotate responsibilities for finance tasks.
- Work with banks to set fraud detection rules and hold periods for suspicious transfers.
- Encourage whistleblowing — ensure confidentiality and no retaliation.
If Something Happens: Response & Reporting
- Immediately isolate affected systems and preserve logs/evidence.
- Notify your bank and halt suspicious payments. Banks and authorities can sometimes freeze transfers if notified quickly.
- Report scams or criminal matters to ScamShield/Singapore Police, CPIB (for corruption), and relevant regulators (e.g., MAS for financial institutions). Early reporting improves recovery chances and helps national data-gathering.
Final Thoughts
Singapore has strong regulatory tools and growing industry initiatives (for example, frameworks to share information and allocate responsibility for scam losses) — yet the landscape remains dynamic, with fraudsters using social engineering, AI, and global networks to target organisations. The most effective defence is a layered one: technical controls, tight financial processes, ongoing staff education, and an organisational culture that treats fraud risk as a board-level issue.
At the same time, prevention and compliance require expert guidance. Timcole’s team of experienced accountants and compliance specialists can help your business put the right financial safeguards in place, ensure accurate reporting, and implement fraud-resistant processes. Reach out to Timcole today to strengthen your financial controls and keep your business safe from fraud.
