Protecting Against Fraud

by Andy Poquette

From the start of the pandemic, countless factors changed in the workplace. Companies of all sizes and industries shuttered, employees adapted to remote meetings, new processes, and working from home. One change that you may not have expected was a rise in fraud. 


Companies that once relied on paper billing processes and physical mailings were forced to adjust. Business mailboxes sat unattended and financial communication shifted to email and electronic payments. 


According to the 2021 AFP Payments Fraud and Control Survey, respondents claimed an increase in fraud at their organizations during the pandemic. The respondents, which included more than 500 treasury and finance professionals across the U.S., reported business email compromise (BEC) as the most common fraud source – at 62% of companies. 


BEC scams take advantage of our digitized lives by sending emails that appear to come from a known sender. They appear to make a legitimate request such as a typical vendor sending an invoice or a leader requesting gift card purchases for employee rewards. 


As businesses began to shift to electronic payments, electronic fraud also increased. In fact, 61% of respondents claimed that Accounts Payable departments were the most vulnerable to BEC fraud.


So, where do we begin fighting this type of fraud? Educating and training employees and leaders on the threat of BEC fraud and how to identify it is the first line of defense. Illustrate what a phishing attempt looks like and when to raise a red flag. It’s also essential to have digital solutions in line to properly protect against fraud. 


Consult your banker or trusted financial advisor to inquire about their solutions to protect your business. Solutions like Check Positive Pay and Automatic Clearing House (ACH) Positive Pay are priceless safeguards to consider for your organization. 


Check Positive Pay is a powerful tool for cash management. When you issue a batch of checks through your accounting program, each check has a certain profile. Those records are exported from your accounting program and imported to the Positive Pay system. As those checks are deposited and reach your bank for posting, details are compared to the details of the check you provided when it was issued. If differences or discrepancies are found, the check is flagged and placed in the Positive Pay “Exception” list for your review. 


ACH Positive Pay helps combat fraud associated with electronic payments. Only your approved list of vendors will be allowed to electronically debit your business account. ACH Positive Pay also allows you to set parameters around the dollar amount that can be deducted. Any electronic transaction that occurs outside of the parameters you have set generates an alert so you can decide whether it is legitimate and then approve or deny the transaction. Enjoy peace of mind knowing that only authorized debits will be paid from your business account.


Both solutions are simple but powerful ways to stop the most common types of check fraud – and secure peace of mind for your company.