Checks Once Again Most Targeted Vehicle For Payments Fraud; BEC Scams On The Rise
Business fraud activity was at an all-time high last year, with 73 percent of finance professionals reporting that their companies experienced attempted or actual payments fraud in 2015, according to new research from the Association of Finance Professionals (AFP). The research showed that more than half of organizations were exposed to business email compromise (BEC) scams, while checks were once again the most popular vehicle for payments fraud.
Despite efforts to reduce payments fraud, the business world still has a long way to go – starting with eliminating the use of paper checks for B2B payments. Results from the most recent AFP Payments Fraud and Control Survey report that nearly three-quarters of companies experienced actual or attempted check fraud. Not only are paper checks susceptible to fraud, but the manual processes that paper checks involve are error prone, expensive, and labor intensive. Read up on the dangers that paper checks present companies in our recent blog post, “Ditching the Paper Check.”
While fraud related to the use of checks is something that has been on finance professionals’ radars for some time, BEC scams – also known as “CEO fraud” – is a newer type of fraud. In August 2015, the FBI issued a warning about BEC scams, noting that at the time of the warning, it had been responsible for $1.2 billion in fraud globally in just the last couple years. Unlike other types of fraud, BEC scams are particularly worrisome because they require considerable effort to execute compared to other types of payments fraud, and often leave hackers with lots of confidential information, the AFP cautioned.
At the end of last year, we shared a blog post on BEC scams, CEO fraud, and fake invoices, in which we called cyber security “a critical issue in financial services.” Cyber security continues to be a critical issue today, and is the responsibility of finance and accounting professionals, as well as IT departments. Fortunately, new technologies, like AP and payments automation can help reduce risk to your business.
Check us out online here, and learn how MineralTree protects its customers from online payment fraud.
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