Protecting your company from business payment fraud

One hard truth of business is that scammers are always on the prowl. For them, your hard work is their payday, and they employ various tactics to access your accounts. The good news is that there are many actions you can take to prevent business payment fraud. 

How to avoid the most common types of payment fraud  

Phishing: the impersonation scam

Phishing is a con that tries to impersonate a company, contact, vendor or employee to gain sensitive financial information. This technique is as old as email and has evolved to include text messages, fraudulent websites, direct phone calls and even “cloned voices” (more on that later). Scammers will often imitate company info and design elements to create convincing digital disguises.  

Avoiding phishing scams requires a combination of software and personal vigilance. Software can scan for harmful links, attachments and unknown senders. Some phishers will still get through, and it’s vital to know how to spot them.  

First and foremost, all phishing scams have “tells,” or signs that something is off. For example, communications from overseas scammers often contain spelling and grammatical errors.  

Another sign is an urgent request or demand that seems unusual. It’s unlikely your CEO would hastily ask for a social security number. And the odds of your company’s tech support urgently asking for a password are almost zero. Yes, sometimes business requires speed, but safety should always be the priority.  

On the opposite side of the spectrum, fraudsters will sometimes use patience and build a friendly rapport over time. However, once the scammer feels confident, they’ll apply pressure to gain account information. This is where your intuition should sound alarm bells, which means it’s time to end the exchange. 

Check and ACH fraud: theft that hides in transactions 

According to the Association of Financial Professionals, 65% of companies surveyed in 2023 experienced check fraud threats. In the same survey, 37% of companies reported fraud from ACH debits. 

You might wonder why these numbers are so high. Successful phishing scams are one reason. Check theft, counterfeiting and altering checks (also known as check washing) are the others. To make sure these stats don’t include your business, we have our own data to put you at ease: 

On average, Positive Pay services at American National Bank prevent $2.5 million in potential fraud every year. These services are affordable, effective and include: 

• Check Positive Pay reviews presented checks against a list of issued checks, flagging discrepancies in amounts, dates, and check numbers. 

• Payee Positive Pay adds an extra layer of security by matching payee names against approved names.  
• ACH Positive Pay uses filters (account presets) to stop payments that don’t align with specified criteria. 
• Dual Custody requires two people to verify each transaction. 

Feeling confident about your business payment security is essential. Positive Pay provides a solid line of defense that greatly reduces your chance of business fraud. 

Take the next step toward a Positive Pay fraud protection plan. 

Wire transfer fraud: always verify before sending 

Wire transfer fraud continues to be a threat. Scammers will impersonate a trusted business, vendor or client in hopes you’ll bypass the most important part of wire fraud prevention: verification. No excuses on this one, verification over the phone with someone you trust is mandatory.  

Chargeback fraud: purchases with bad intent 

Chargeback fraud occurs when a customer disputes a charge to avoid payment. While many chargebacks are legitimate, fraudulent ones can lead to substantial losses. Who’s most at risk? Companies selling higher-priced goods and services as well as online retailers.  

To prevent chargebacks, have a clear return policy and easy-to-access customer service. Make sure your company name matches the name that appears on your customers’ financial statements to minimize confusion. Additionally, track all packages to ensure every purchase was delivered as promised.  

If a suspicious chargeback occurs, dispute it with the customer’s credit card company as soon as possible. To help prove fraudulent intent, you’ll need to have documents that show proof of delivery, payment information, your return policies and all attempts to make customer contact.  

Cloned voices: AI scams have arrived

At the time of publishing, cloned voice scams are relatively new, but they’re out there. For this new type of voice fraud to work, a fraudster uses AI to create a “cloned voice” that impersonates someone you know. This synthetic voice will then ask for digits that put your accounts at risk. 

How can you prevent fraud from someone that sounds like a friend? You’ll need to use a spoken security phrase before discussing financial information. It may seem like something from “Mission Impossible,” but using an audible security phrase is another form of multi-factor authentication. If the other “person” doesn’t respond correctly, hang up immediately. 

Educate your workforce on fraud prevention. 

Business payment fraud is an all-hands-on-deck endeavor. Everyone, regardless of title, should understand types of fraud and know how to spot each. Your company should also practice fraud prevention “housekeeping” that includes changing passwords frequently, updating software, storing checks in a secure place and shredding any financial documents that are not locked away. Many companies also hold frequent training sessions to improve employee participation. By taking these steps, you can feel more confident that your business—and customers—are properly defended.