With financial fraud taking many different forms, it is more important than ever to ensure you have the right processes, tools and training to protect your business and your employees. Criminals continue to evolve their tactics, targeting organizations of all sizes and industries.
A proactive approach that combines strong controls, employee awareness and the right banking tools reduces risk and limits potential losses.
Check fraud
Even with fewer checks in circulation, check fraud continues to rise, putting sensitive information at risk.
Criminals often steal checks by going through garbage, breaking into mailboxes or, in some cases, by tricking a company employee. Fraudsters may alter the payment amount, the payee name, or “wash” a check by removing the original ink so they can rewrite the details and create counterfeit versions. Banking information taken from stolen checks can also be used to initiate unauthorized Automated Clearing House (ACH) transfers or digital payments.
Business email compromise (BEC)
According to the FBI, business email compromise (BEC) is one of the most financially harmful forms of cybercrime. Fraudsters impersonate a trusted source such as a CEO or a vendor to trick employees into transferring funds or sharing sensitive information.
For example, an email may appear to come from an executive and include a link to input confidential information.
Strengthen processes and protocols
Take time each day to reconcile your accounts. While this may seem cumbersome, it is a critical step in identifying suspicious activity early. Tools such as FNB’s Positive Pay identify, flag and report unauthorized check transactions. ACH Debit Filter ensures that only authorized transactions post to your accounts while improving efficiency and reporting.
Strong employee training is also essential. Employees should understand how to handle sensitive information digitally and physically, how to create an effective password and how to respond to suspicious activity.
For example, to prevent BEC employees should call a trusted contact at the vendor using a known phone number to confirm whether a payment platform has changed or if the message was fraudulent. Similarly, if an employee receives an email requesting immediate financial action, even seemingly from executives, internal controls and verification procedures should be in place to confirm the legitimacy of the request.
Separate duties
Separating responsibilities among multiple employees reduces fraud risk both internally and externally. One employee may initiate a payment, while another reviews and approves it. Multiple layers of authentication limit a criminal’s ability to initiate transactions if employee credentials are compromised.
On the receiving side, employees handling incoming checks should not have access to other areas of the accounting process. Lockbox solutions also may be beneficial, allowing your bank to receive and process payments directly from vendors or customers.
Act quickly and maintain transparency
If you suspect or experience fraud, act immediately. Contact your bank as soon as suspicious activity is identified to limit potential losses.
Continue educating employees on the steps to take when fraud is suspected. Transparency throughout the process fosters an environment where employees feel comfortable reporting concerns and acting without fear or embarrassment.
Remember: Banks will never call to request personally identifiable information, confirm account details or initiate a transfer.
