Proactive Payments Fraud Prevention

Posted on August 26, 2024

Fraud is a critical challenge facing businesses and banking today, and payments fraud is a rising threat that impacts all forms of payments: wires, ACH, and checks.

In fact, 80% of all businesses surveyed¹ experienced fraud or attempted fraud last year, according to a recent study published by the Association of Financial Professionals.

With statistics like that, it’s likely your business will be impacted by fraud at some point—if you haven’t been already. But there are safeguards you can implement to help prevent fraud before it happens. Our Treasury Management team hosted a webinar to discuss recent trends, real-life examples of payments fraud, and how fraud prevention services offered by United can help. You can click here to watch the full conversation—or keep reading for a recap of the topics we covered.

What should I know about payments fraud?

How has the landscape changed? As things continue to move toward accessibility and convenience, it becomes easier for fraudsters to operate remotely and avoid detection. In the past, fraud was fairly intimate—it was often fairly obvious and likely a rogue, in-person individual. But now, scammers can be an ‘invisible enemy.’ When faced with fraud, many businesses are surprised by how sophisticated the methods have become.

How do I protect myself from fraud now?

What are some vulnerabilities or key indicators I can monitor? Some of the most effective methods to protect yourself are also some of the simplest. We recommend to:

Review internal controls: Make an honest assessment of your internal controls. Set expectations around dual controls and separation of duties.
Take a big-picture view: Look at all the potential fraud touchpoints for your various payment methods and assess how you can lessen the risk.
Be perpetually skeptical: Be wary of anything out of the norm, like someone trying to force unusual urgency with a payment.
Be tolerant of the skepticism of others: Tools like multifactor authentication and fraud prevention tactics from your partners or financial institutions can sometimes reduce convenience, but they’re meant to save you from fraud.
Train employees: It’s important for all employees, especially those in treasury and accounting departments, to understand the risk of fraud and how to mitigate it.

Protecting your business from payments fraud can feel daunting—and expensive. But even if you have a smaller business, you can still take these steps and prevent fraud effectively. Many fraud prevention tools automate fairly simple processes around being attentive, monitoring statements, and checking online portals.

As a small business, you can focus on the concept rather than the tool and set up a process to stay vigilant manually. On top of that, you can implement fraud prevention services, like Positive Pay, or even just best practice information and guidance.

What’s Positive Pay?

Positive Pay is a fraud prevention service offered by financial institutions to help customers detect check fraud. You provide us with the information on checks you write, and we’ll compare it against the checks presented for payment. The tool scans checks to make sure they match your check register or the limits you’ve put in place. Any discrepancies will trigger an alert to you through your desktop or mobile app so that you can pay or return exception items each morning. There is a Positive Pay service available for ACH debit transactions as well.

Positive Pay helps save time and money when fraud is detected by rejecting unmatched items before they post to your account, reducing the risk and inconvenience of needing to close and reopen your account.

During the webinar, our team walked through a demo of the Positive Pay tool. You can view that demo here.

I think I’ve been scammed. What should I do now?

The very first thing you should do is immediately contact your financial institution. They’ll help you get your accounts locked down as quickly as possible and recommend the best next steps. After that, we recommend filing a police report.

Everyone is busy, but fraud happens when you let your guard down. It’s important to stay vigilant, keep fraud and protecting your payments top of mind, and revisit your prevention plans often. We’d recommend auditing your processes monthly to make sure they’re still effective.

And, we’re always here to help you. If you’d like to learn more about payments fraud or discuss enrolling for Positive Pay, click here or reach out to your regional treasury solutions officer or local banker.

¹ Source: 2024 AFP Payments Fraud and Control Survey