Fraud is like learning to ride a bike – it’s not a matter of if, it is a matter of when you fall.
Fraud is becoming an increasingly common problem for both individuals and business alike. The need to know about current trends and how to protect you/your business against fraud has never been more critical than now. Take a look at some of the common fraud trends and best practices to fight fraud!
Fraud: Current Trends
- Account Modification Schemes: Bad actor intercepts emails and messages, changing wiring information or initiating new wires, typically to accounts based overseas. Current trend is to convert funds into cryptocurrency to make it difficult for authorities to track the fraud.
- ACH fraud: Bad actors have become more sophisticated and use account information available on checks to initiate an ACH debit to fraudulently withdraw funds from an unsuspecting company’s account.
- Check Fraud: Approximately two-thirds of payment fraud is still committed via check – either by creating a fraudulent check or by intercepting a real check, and changing the payee name to the fraudster. The payment amount is sometimes changed as well.
- Investment Schemes: Bad actor gathers any information possible to better target participant for fake investment opportunities; often over text message.
- Phishing: Bad actors harvest login credentials via fake online pathways, to use on other websites for financial gain.
- Ransom Ware: Computer accounts are compromised by bad actors who demand payment before “unlocking” computers. During the time where your computer is being compromised, bad actors are searching your database for enough information to inform their financial demand.
- Romance Fraud: A faux relationship, (often online) which begins in a seemingly harmless way, and later the bad actor urges participant to transfer funds.
- Vendor Scam: Bad actor sends emails with fake overdue bills; usually with an urgent message for payment. Bad actor might try to update wiring details via email, using the overdue payment notice as a scare tactic.
What can we do to prevent fraud?
Common sense and slowing down can significantly increase your ability to detect potential fraud.
- When checking emails, paying bills, and answering the phone – slow down and take your time. Don’t give information to anyone who hasn’t proven their credibility. Consider what loss your company can sustain before transferring funds.
- Contact your bank to implement Positive Pay for check and ACH. Positive Pay helps prevent fraudulent checks and ACH transactions from clearing your account.
- Use the payment details you currently have on file – and if in doubt, call the contact you already have to verify. Don’t make “quick changes” to payments or payroll.
- Review and assess current procedures for wiring and verification. Consider how current policy corresponds to business needs. Follow established protocol.
- Invite an expert to audit your current system using a risk assessment. Evaluate this annually.
- Incorporate multifactor authentication into login journey.
- Develop an incident response plan.
- Add your bank’s phone number to your phone contacts.
I became a victim of fraud – what should I do?
- Call your bank(s) and report the fraud incident as soon as possible.
- File a fraud report at gov. Remember that the FBI is not a remediation service, but reporting fraud can help other victims of fraud with potential related cases.
- For victims of Identity Theft – reference Tradition Capital Bank’s Identity Theft Toolkit for a step-by-step plan to recovery.
About Tradition Capital Bank:
Tradition Capital Bank is a nimble, innovative bank that was founded in 2005 by a group of entrepreneurs and grown through a diverse, powerful network. They offer local connection – daily practicing integrity, generosity, and unparalleled, high-touch service. TCB provides complete credit, depository and treasury management solutions to business owners, executives, professional services companies, and nonprofit entities. Member FDIC. Equal Housing Lender.
