Definition
Fraud committed by suppliers against an organization.
Context
Vendor fraud typically occurs in procurement and contracting processes and is closely linked to fraud schemes, collusion, and weaknesses in internal controls and vendor due diligence. Internal employees are often involved, for example through kickback schemes or conflicts of interest.
Meaning
Leads to financial losses, quality risks, and distorted procurement decisions and represents a key risk area in purchasing functions.
Example
Billing for services not performed.
Sources
Suggested citation
wirtschaftsforensik.ch Editorial Team: "Vendor Fraud", in: Glossary, wirtschaftsforensik.ch, https://wirtschaftsforensik.ch/glossar/vendor-fraud/, accessed April 18, 2026.