According to the 2019 AFP Payments Fraud and Control Survey Report, sponsored by J.P. Morgan, payments fraud hits a record high. The report shows that 82% of companies were targets of payments fraud in 2018 and 43% experienced direct financial loss as a result. This is alarming considering that we have seen a 20% increase over the past 5 years. While businesses are taking security measures, attacks against payments systems continue to soar.
What exactly is payments fraud you ask? It is any type of false or illegal transaction that is completed by a cyber criminal. The perpetrator deprives the victim of funds, property, interest or sensitive information via the internet.
Additionally, the survey revealed other fraud statistics that highlight the need for your company to take preventive actions to protect corporate assets:
- 80% of organizations experienced Business Email Compromise (BEC)
- 54% of organizations reported financial losses as a result of BEC
- 70% of BEC scams targeted checks, followed by wires at 43%
- 64% of attempted or actual payments fraud resulted from actions of an individual outside the organization
- 58% of companies reported that payments fraud originated via BEC
- 22% of companies experienced fraud perpetrated by third parties or outsourcers, such as a vendor
The BEC scam continues to grow and evolve, targeting small, medium, and large businesses and personal transactions. Between December 2016 and May 2018, there was a 136% increase in identified global exposed losses. The scam has been reported in all 50 states and in 150 countries.
Prevent This From Happening to YOU!
Although it can be quite challenging to entirely eliminate the threat of fraud, you can help protect it! Below are a few suggestions to help protect your company against payments fraud:
- Maintain awareness of the latest fraud trends
- Test your employees’ knowledge of how to respond to spear phishing/click-bait attacks
- Train employees to recognize social engineering tactics used to gain illegal information
- Use Positive Pay – 90% of organizations surveyed by AFP’s 2018 Payment Fraud and Control Survey reported that they use Positive Pay to guard against payments fraud
- Reconcile accounts daily to allow unauthorized ACH debits to be identified and returned in a timely manner
- Block all ACH debits except on a single account setup with an ACH debit filter or ACH Positive Pay
- All requests to change existing bank account information should be heavily scrutinized, with a call-back verification to a pre-established phone number to confirm the request is legitimate.
Source: AFP 2018 Payments Fraud and Control Survey and 2017 Treasury Fraud and Controls Survey by the Strategic Treasurer
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