RECENT AFP STUDY SHOWS PAYMENTS FRAUD IS AN INCREASING PROBLEM
The 2021 Association of Financial Professionals Payments Fraud and Control Survey Report shows payments fraud is evolving due to the changing business environment. Perhaps more alarming is most of the payments fraud attempts/attacks came in the form of Business Email Compromise (BEC). It’s now more critical than ever that businesses put processes and controls in place to help mitigate risk.
Targets of Attempted and/or Actual Payments Fraud Trends
Contributing to the decline in check fraud (down from 74% in 2019) is the fact that organizations are using fewer checks in their B2B transactions, partly driven by the necessity for electronic payments to a remote workforce. However, checks still remain the most frequent target. Overall, fraud payment types include:
Business Email Compromise: A Growing Problem
Continuing as the leading source of fraud, Business Email Compromise (BEC) was experienced by 75% of reporting organizations, with 62% reporting it as the most common source of payments fraud attempts.
BEC is a scam targeting business’ payment processes. Essentially, a fraudster takes over valid business email accounts through social engineering or computer intrusion techniques to process unauthorized transfers of funds. The individual responsible for processing payments is tricked into thinking the request is valid, coming from a company leader, partner or third-party vendor, and processes the payment.
Payment Methods Impacted by BEC
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Using Tools, Resources and Education to Help Mitigate Fraud Risk
Implementing protective measures and processes can help reduce a company’s risk of being the next target. Employee education and training, paired with available tools and resources can be extremely valuable. Organizations reported the following practices help reduce risk:
Company Fraud Policy
Safeguarding with Additional Protective Measures
Payments fraud can be reduced, if not avoided completely, by understanding the prevalence and threat of fraud and recognizing prevention as an ongoing, critical business strategy. Financial products, services, and fraud prevention tools and resources are available.
Association for Financial Professionals: 2021 Payments Fraud and Control Survey Report
As with all serious financial topics or decisions, be sure to consult with a trusted financial advisor beforehand. The content here is for educational purposes only and is not meant to serve as any sort of advice or endorsement.
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