Safeguard Your Business from Payments Fraud

Success in business is a constant struggle to outwit the competition. After putting in so great an effort, you don’t want to see your profits siphoned off by fraud. Unfortunately, businesses of all sizes can be the targets of payments fraud, and these attacks are on the rise. Businesses are responding by tightening up security and implementing solutions to detect and stop fraud.
 

According to the 2020 AFP Payments Fraud and Control Survey, respondents reported that safeguarding their organizations against fraud continues to be a top concern. Some key findings from the report include:

• 81% of organizations were targets of payments fraud in 2019, which is the second highest percentage of reported fraud attacks/attempts since 2009.
• 74% of organizations reported attempted or actual check fraud in 2019, an increase of 4% since 2018.  
• 33% reported that their organizations’ payments via Automated Clearing House (ACH) debits were targets of attempted or actual payments fraud.
• 75% of organizations reported business email compromise (BEC) in 2019. BEC includes emails from fraudsters impersonating vendors to direct transfers into fraudulent accounts, other third parties requesting changes of bank accounts or payment instructions, and fraudsters pretending to be senior executives using spoofed email domains.
• 80% of organizations are taking steps to educate and train employees to detect BEC more effectively.
• 70% of organizations have policies for providing verification of any changes to existing invoices, bank deposit information and contact information.
   

A variety of tools, policies and procedures can help you protect your organization from being a target of payments fraud.

Use positive pay, which reconciles checks presented for payment against a file of checks issued by your organization. When checks presented do not match your issued check file, you decide whether to pay or return checks flagged as exceptions. This is your best defense against counterfeit checks. You may also want to implement payee verification, so that a payee name is presented with the positive pay issue file.

Employ ACH debit block and filter service. It enables you to set parameters acting as a filter for ACH postings to an account. For example, you can block debits from all but specified originators, block debits above a certain dollar threshold or block all debits for an account.

Implement internal controls. Following specific policies and procedures within your organization can provide significant roadblocks to fraud:

• Convert as many payments as possible to electronic delivery.
• Implement dual controls over initiation and approval of payments.
• Use high-quality check stock with built-in security features, and purchase it from known vendors. Develop policies on how check stock is ordered and delivered. Store check stock securely.
• Use secure financial document destruction processes.
   

Educate employees. Wire fraud scams initiated by email are becoming increasingly sophisticated and hard to detect. Train employees to be on the lookout for potentially fraudulent emails requesting financial information — whether coming from inside or outside the organization. 
 

Your business banker at Amegy Bank can help you choose the most appropriate fraud protection tools for your business. We can work together to safeguard your business from payments fraud.