Payments fraud isn’t a business challenge you can resolve with a single magic bullet. Mitigating fraud exposure — and protecting your business against a potentially crushing loss — requires a layered approach, one that melds multiple tools and best practices.
Based on the fraud trends we’re seeing, in that layering process, one of the most valuable tools a business can adopt is Positive Pay for check and ACH.
In the latest Association for Financial Professionals (AFP) Payments Fraud and Control Survey, nearly 8 out of 10 organizations reported experiencing payment fraud attempts. Checks continues to be the payment method most targeted by fraudsters, AFP says.
Indeed, check fraud is the type of fraud we’re seeing impact our business clients the most these days.
Fraudsters use various schemes to unlawfully obtain checks and either alter them — e.g., change the payee name and increase the amount — or create new, authentic-looking counterfeit checks using information gleaned from the stolen items. The criminals then either cash the fraudulent checks or deposit them into accounts they control.
Check Positive Pay, a fraud-prevention service offered by banks, provides an effective layer of defense against this type of threat.
Here’s how it works: A business transmits a file of check issuance information to the bank prior to mailing or disbursing checks. The file includes check numbers, amounts and payee names. When each check is presented for payment, the bank compares it against the check issuance file. When there are discrepancies between the presented check and what’s in the check issuance file, an image of the suspect check is referred to the business for a pay or return decision.
When a client consistently submits check issuance files to the bank on a timely basis, potential fraud losses can be significantly reduced.
Using the Treasury Manager mobile app, our clients can decision suspect items through Check Positive Pay.— by the 12:30 p.m. Central Time deadline — from any location using their mobile phones.
Another major fraud threat you’re facing is business email compromise (BEC). In AFP’s most recent fraud survey, 63% of respondents reported experiencing attempted attacks.
In BEC fraud, a fraudster might send someone in your business with payment-origination authority an email, purporting to be from a senior company executive, ordering the recipient to send an electronic payment — an ACH or wire transfer — to an account controlled by a bad actor.
In other variations, the email sender pretends to be a trusted contact at a vendor and asks the recipient to send the next trade payment to a different account number.
With BEC, the fraudster tries to trick your employees into sending payments or sharing sensitive information. To combat this scam, companies need to layer in a variety of best practices to bolster their defenses, including enforcing strict payment controls and confirming payment instructions verbally.
Our Fraud Prevention Checklist details a series of best practices designed to thwart BEC fraud.
When you think about what a major fraud attack could cost — thousands or even tens of thousands of dollars — it makes sense to use all the tools at your disposal to protect your business.
In addition to Check Positive Pay for defending against check fraud, Hancock Whitney offers tools to defend against electronic payment fraud such as ACH Positive Pay , ACH Block, ACH UPIC and Safewire. Talk to your banker to learn more about all these tools, and develop a strong, layered fraud-defense program for your business.
Hancock Whitney Bank, Member FDIC