By Jami Theiller
Payment fraud poses a significant threat to businesses today, jeopardizing both financial stability and reputation. As we all increasingly rely on digital transactions, the risk of fraudulent activities escalates. Here are a few tips on how you can fortify your defenses against payment fraud.
Payment fraud can take on various forms, including social engineering fraud, check fraud, and electronic banking fraud. These schemes exploit vulnerabilities in your payment processes to divert funds to unauthorized recipients. The consequences can be severe, with businesses losing billions of dollars annually to fraudsters.
The statistics on business payment fraud reveal alarming trends. According to the 2023 Association for Financial Professionals Payments Fraud and Control Survey, 65% of organizations experienced payments fraud attacks/attempts in 2022, with 71% falling victim to business email compromise scams. Checks remain the most vulnerable payment method to fraud, with 63% of respondents reporting fraud activity via checks. Additionally, instances of fraud via commercial cards, ACH credits, and virtual cards have been on the rise. Despite efforts to recover lost funds, 44% of organizations were unsuccessful in recouping any stolen funds.1
As mentioned above, three common types of payment fraud include social engineering fraud, check fraud, and electronic banking fraud. Below are brief descriptions of each:
To combat these crimes and the potential for substantial losses, implement the following measures at the very least:
Payment fraud remains a persistent threat, but proactive measures can mitigate the risks and safeguard your business assets. By prioritizing fraud prevention and implementing comprehensive safeguards, you can shield your business from potential financial devastation. Stay vigilant, stay informed, and stay protected against payment fraud.
Jami Theiller is senior vice president, cash management sales manager, at First Citizens Community Bank headquartered in Mansfield, Pa. Theiller has over 18 years’ experience in cash management services from her time with Graystone, Susquehanna, BB&T, and First Citizens Community Bank (FCCB). She was FCCB’s employee of the year in 2022. Theiller can be reached at jatheiller@myfccb.com.
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Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of the PICPA's officers or members. The information contained herein does not constitute accounting, legal, or professional advice. For actionable advice, you must engage or consult with a qualified professional.
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