Overall, payments fraud is the lowest it has been in nearly 10 years, according to an annual report released in May by the Association for Financial Professional and J.P. Morgan.
About 65% of survey respondents said their business had experienced actual or attempted payments fraud in 2022. This is six percentage points lower than last year and marks the lowest percentage since 2014.
More Payments Fraud Trend Highlights
Checks Remain the Most Risky
About 63% of organizations reported incidents of check fraud activity. Despite this risk, about 75% of businesses that use checks on a regular basis say they plan to continue using them.
Digital Payments Fraud is Up
While overall fraud is trending down, there was an increase in digital payments fraud, with credit card fraud rising 10%.
Business Email Compromise Still Common
Business Email Compromise (BEC) is still the preferred method of payments fraud by scammers. 71% of companies were victims of payments fraud via email in 2022. Larger organizations are more susceptible than smaller ones.
Retrieving Funds Lost to Fraud
Fewer than 30% of businesses were able to recover at least 75% of dollars lost to payments fraud. Larger organizations are better equipped to recover funds.
Controls for Preventing and Containing BEC Payments Fraud
Because Paper Checks are the most common target for payments fraud, it is most important to secure these payment methods first.
Businesses can secure paper check payments with Positive Pay. With Positive Pay, banks only cash paper checks on a pre-approved basis. Learn More About Positive Pay.
Businesses can better secure ACH payments with the automation, ACH direct and Safe File Transfer Protocol. Learn more about how to Make ACH Safe.
Here are other important steps to take to secure payments against fraud:
- Implementing verification policies to check any changes to existing invoices, banking info and contact information
- Live confirmation– any requests for funds transfers checked by calling an authorized contact at the vendor
- Implement an approved contact list for vendors and not numbers listed in an email
- Strict internal controls around payments initiated by emails or other less secure messaging systems
- Require signatures from senior management payments over a specified threshold amount
- Strict user authentication and tracking to access network and payments initiation
How to Prevent Accounts Payable Fraud with AP Automation
With the right AP automation software, it is easy to implement the controls listed above to prevent BEC payments fraud. AP software can also help secure your payments against internal and external fraud in the following ways.
- Prevent false billing, fraudulent payments and reporting fraud by aligning security and payments teams on one solution with user-based approvals and time stamping for audit traceability/approvals tracking, as well as customizable workflow management controls.
- Prevent phishing and duplicate payments with built-in detection, prevention & security
- Reduce reporting fraud by integrating payments software directly with your accounting software to eliminate manual data entry.
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