Insights from the latest EPC Fraud Trends Report (2): IBAN manipulation, invoice fraud & the growing need for payee verification
Invoice fraud is not a new phenomenon. But according to the EPC 2025 Payments Threats & Fraud Trends Report, it has now become one of the single biggest drivers of APP fraud across Europe. Criminals increasingly bypass technical security measures altogether by exploiting something much simpler: trust in invoices and payment instructions.
In this second article of our series, we explore how IBAN manipulation works, why it is rising sharply, and why Verification of Payee (VOP) is emerging as an essential safeguard for PSPs and their customers.
Why invoice fraud is increasing so rapidly
The EPC report highlights that fraudsters have refined their approach and now focus heavily on altering payee information, rather than hacking systems. They know that businesses and individuals rarely double‑check the IBAN printed on an invoice, especially when everything else looks familiar.
This fraud typically appears in three forms:
- Manipulated Paper or PDF Invoices
Fraudsters intercept or clone invoices and modify only the IBAN field.
Logos, formatting, and references remain unchanged, making the fraud almost invisible to the eye.
- QR-code Tampering
With more companies adopting QR codes for SEPA payments, criminals have moved to replacing the QR‑encoded IBAN while leaving the visible invoice unaltered.
The EPC report cites cases involving EV charging stations, fake bank letters or supplier invoices.
- Fake Payment Requests (RTP messages)
Fraudsters impersonate legitimate organisations such as telecom companies, public authorities or insurers, and send highly realistic “requests to pay”. Many victims approve without verifying who the beneficiary is.
These scams often end in Authorised Push Payment (APP) fraud, one of Europe’s fastest‑growing fraud categories.
The role of AI: more convincing, more targeted scams
The EPC report emphasises how AI tools have supercharged invoice and payment-request scams. Criminals now generate:
- flawless emails in any language,
- realistic supplier notifications,
- well‑formatted invoices with no grammatical errors,
- and, in some cases, deepfake audio used to “confirm” urgent payment changes.
This dramatically boosts credibility and therefore fraud success rates.
Why IBAN manipulation works so well
There are three main reasons why these scams are so effective.
First, familiarity breeds trust. When an invoice matches past transactions or regular supplier details, clients rarely suspect fraud.
Then, email is insecure by design. Invoices travel through channels that can be intercepted or altered without detection.
Finally, instant payments reduce reaction time. As SCT Inst adoption grows, funds disappear in seconds, while victims and PSPs have little opportunity to intervene.
This is precisely why regulators stepped in.
The regulatory shift: VOP becomes compulsory
The EU’s Instant Payments Regulation and upcoming Payment Services Regulation (PSR) introduce a major requirement: an IBAN–name matching service must be offered before executing credit transfers.
To support this mandate, the EPC created the Verification of Payee (VOP) Scheme, which took effect on 5 October 2025.
According to the EPC, VOP helps:
- prevent IBAN manipulation,
- reduce invoice-based APP fraud,
- improve customer confidence,
- enhance the integrity of instant payments.
It is one of the most significant fraud-prevention advances introduced in the SEPA ecosystem in years.
How LUXHUB VOP supports PSPs and their customers
LUXHUB’s VOP platform enables banks and PSPs to comply with the SEPA VOP scheme and improve customer protection by:
- checking the beneficiary name against the IBAN before payment execution
- alerting the user to mismatches in real time
- reducing invoice fraud at the source
- helping corporates validate suppliers more reliably
- improving accuracy and transparency across payment flows.
For businesses dealing with large payment volumes, this can immediately reduce exposure to fraudulent invoices.
As highlighted in the EPC 2025 Fraud Trends Report, IBAN manipulation and invoice fraud continue to fuel a significant share of APP fraud across Europe.
With instant payments accelerating money movement, verification before execution becomes critical. VOP is not only a regulatory requirement, it is a practical defence that improves trust and reduces preventable losses.
Next, in our third and last series article, we examine how instant payments reshape the fraud landscape and why pairing VOP with real‑time fraud intelligence (such as LUXHUB’s FNC‑RF) provides the strongest protection layer.