How To Protect Yourself From Payments Fraud With Banks

You’ve taken the proactive step of investing in cybersecurity and fraud prevention training for your team, equipping them to recognise business email compromise and various fraud tactics. While enhancing employee knowledge can bolster cyber vigilance and thwart some attacks, there are still potential payment fraud schemes that your organisation might miss.

Many small to medium-sized businesses often operate with limited personnel, oversight, and controls, depending heavily on a select few trusted employees to handle payment processing. Fraud can affect any organisation, whether it stems from internal employees or external threats. Management must implement effective policies and procedures for handling payments, such as mandating dual approvals to protect against unauthorised fund releases, irrespective of how payments are made.

According to the Association for Financial Professionals Payments Fraud and Control

Survey, nearly 75% of businesses that issued checks reported experiencing attempted or actual payment fraud last year. Additionally, checks represented 42% of all business-to-business transactions.

Checks carry sensitive account details that can expose your organisation to fraudulent activities. Have you considered the various points in a check’s life cycle where a criminal could exploit vulnerabilities?

Check Life Cycle
Once a check is issued, there are several stages where a fraudster might intercept the payment.

Outgoing Mail:
After a check is prepared in your office, it typically gets placed in outgoing mail for collection.

Mail En Route:
The check makes its way through various transit points before reaching the intended recipient’s office.

Incoming Mail:
Upon arrival, the check may be handed directly to the payee or could remain in a personal mailbox awaiting collection.

Ways Fraudsters Exploit Account Details

Once a fraudster gains access to your account details, they can manipulate checks and initiate fake payments:

1. Modifying Payee and Amount
Using substances like acetone, fraudsters can erase the existing information on checks and replace it with their payee’s name or change the specified amount.

2. Counterfeit Check Creation
With advanced techniques, fraudsters can produce fake checks using check paper and incorporate your stolen checking account number.

3. Electronic Payments via Account and Routing Numbers
Fraudsters can leverage your account and routing numbers to carry out electronic transactions, such as paying utility bills or making online purchases. These transactions are often small enough to escape immediate notice but can accumulate significantly over time. If you detect any unauthorised activity on your account, contact your bank without delay.

Fraud Prevention for Checks

DBS Chase has introduced a new digital platform that allows small and medium-sized businesses to enrol themselves and enhance their financial security with advanced fraud prevention measures:

1. Check Protection Services (Chase Connect®) or Positive Pay (DBS Access®): When you issue checks, you provide the bank with details about them. You then can approve or reject payments for checks that do not match your provided information, including discrepancies in the payee’s name, the amount, and the check number.

2. Check Monitoring (Chase Connect®) or Reverse Positive Pay (DBS Access®): This feature enables you to set a specific monetary limit. Any checks that exceed this limit will require your confirmation before payment is processed.

3. Post No Checks (PNC): This service prevents any fraudulent checks from being processed on accounts that do not utilise check writing. If you do not issue checks from your account, PNC will ensure that no checks can be cashed against it. It may be wise to centralise your check writing to a single account and implement PNC services on your other accounts. To activate PNC, please reach out to your Client Service Representative.

Tools for Preventing ACH Fraud

Your organisation has the option to implement additional tools designed to safeguard your accounts against electronic fraud in ACH transactions:

Cashflow360SM: This solution automates and simplifies your billing, payment, and invoicing processes digitally, enhancing both ease of use and security. It enables your vendors to handle their own ACH payment details while allowing you to outsource check printing services for secure distribution. By utilising electronic payment methods, you can reduce the exposure of your account information, thereby decreasing the risk of fraud.

ACH Debit Block: This feature allows you to determine which ACH debits are permitted to withdraw funds from your account. You can customise it based on specific amounts and vendors, as well as set user permissions to control which employees have the authority to establish or modify these parameters. In the event that someone gains access to your account information, this block will prevent any unauthorised electronic withdrawals.

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