Financial well-being January 5, 2024 By
Fraud is an ever-present concern for businesses of all sizes and industries, specifically small to medium-sized businesses, where even one instance of fraud can have detrimental financial and reputational consequences. And with today’s advancements in technology, it is easier than ever before for fraudsters to alter, forge, and counterfeit checks or commit ACH fraud where only two pieces of information are needed - your routing and checking account numbers.
One recent scheme was uncovered where fraudsters were holding postal delivery people up at gunpoint. They weren’t stealing the mail before it was delivered; rather, they were stealing the postman’s keys! Each postal key can fetch up to $5,000 on the black market. Fraudsters love USPS keys because each key opens all the blue mail drops in a zip code. In addition, it takes the USPS considerable time to replace all the keys once they are stolen. This gives fraudsters considerable time to steal mail and your checks undetected!
As we move into 2024, peace of mind is a priority, including knowing that you and your business are protected. When it comes to protecting your company against fraud, prevention is key. Businesses must have strong anti-fraud tactics in place, which means investing in tools to help detect and prevent fraud.
So how do you beat the fraudsters?
Positive Pay with payee validation is a fraud-monitoring tool that helps protect businesses from fraud associated with check fraud. Positive Pay with payee validation aims to confirm that key check data was issued by the business when a check is negotiated and before it impacts your business.
Positive pay with payee validation confirms the check amount, check number, issuance date, and the payee before it is negotiated. With Positive Pay, every check presented for payment is inspected and verified before it’s cleared. If Positive Pay detects a suspicious transaction or finds an item you did not preauthorize, you will be notified and have the option to pay or return the check(s).
FUB Tip: An alternative way to beat the check fraud scam is to stop issuing checks and switch to electronic ACH payments. The ACH network is a very secure electronic network where businesses can initiate payments to vendors and employees. For businesses that opt to originate ACH payments, payments can be sent for same-day credit or settle in one day. Many businesses are moving in this direction due to improved payment speed and increased security parameters - no more “checks in the mail. Contact FUB to learn more.
Stay aware, stay nimble.
According to a survey by the Association for Financial Professionals (AFP), 71% of surveyed organizations experienced payment fraud activity in 2021, with check and ACH debits being the payment methods most susceptible to fraud. Furthermore, 60% of organizations reported they check fraud incidents, and 37% reported incidents of ACH debit fraud in 2021.
No business is immune from fraud, and if your business is compromised, the aftermath can be time-consuming and tedious - filing a police report, closing your account, and redirecting funds to a new account are just some of the hassles you are likely to encounter - aside from the monetary losses incurred.
The payment landscape is ever-changing. Awareness of potential threats and a trusted banking partner are vital to keeping you and your business one step ahead of fraudsters.
