Fraud is one of the biggest challenges facing the nation’s financial systems. Through the use of computer technology and basic resourcefulness, criminals are finding it increasingly easy to manipulate checks to defraud customers and businesses. 


Bank of Central Florida exists to equip you on your financial journey. We will be hosting two Fraud Prevention Information Sessions with our expert Treasury Team, via Zoom.

 

The sessions will take place on Tuesday, September 20 and Thursday, September 22 at 9AM. RSVP HERE.


We have highlighted some information on what businesses and consumers can do to prevent becoming a victim to fraud. Read below to learn how to PREVENT Check, ACH, Wire and Vendor fraud before it happens.



CHECK FRAUD

Check Fraud can occur when scammers alter checks, create counterfeit checks, or manipulate checks written against closed accounts.

 

Prevention Measures

  • Use Positive Pay. Positive Pay allows a company and its bank to work together to detect check fraud by identifying fraud items through a detailed system. Checks not meeting the criteria are sent through the online banking system to be reviewed, whether to pay or return the check.

  • Review bank activity daily ensuring to open the check icon to verify payee.

  • Find ways to replace paper checks with electronic payments.


ACH & WIRE FRAUD

ACH & Wire Fraud can occur through phishing scams, illegitimate invoices and viruses.

 

Prevention Measures

  • Verify by phone before you send funds. Always call the vendor, business partner, or colleague directly to verify the information. Use numbers you know are correct.

  • Never initiate any changes based only on email or text communication.

  • Be cautious of new payment information. Beware of email requests instructing a routine wire payment to be sent to a new account.

  • Match your payment to a legitimate invoice before paying. Prior to sending payments, ensure the payment requested matches a legitimate invoice.

  • Verify before clicking on a link or opening an attachment in an email or text. It may appear to be from someone you know, but it may be a fraudster.

  • Double-check the email address. Fraudsters are tricky and can create email addresses that look very similar to the legitimate account.

  • Do not respond to email as verification. Don’t reply to the requester by email.

  • Know and trust who you are working with. Before doing business with a new company, search the company’s name online with the term “scam” or “complaint.” Read what others are saying about the company.

  • Keep the processing of your financial activities limited to as few machines as possible and limit the other activities such as web surfing on those machines.

  • Consider financial security procedures that include a two-factor authentication process or dual control for electronic funds transfers.

  • Know the habits of your customers, including the reason, detail, and amount of payments. Beware of any significant changes.

  • Consider frequent and regular patching of your business systems.

  • Use a quality next-gen antivirus solution — one that watches for behavior anomalies and not just signatures.

 

VENDOR FRAUD

Vendor fraud happens when a vendor swindles a company using fictitious or bogus documents. 

Sometimes, the fraudulent activity is orchestrated by a vendor acting alone. Other times, it is carried out with the assistance of an employee (this is more common). Vendor fraud is difficult to detect and research has shown that it takes an average of 18 months to detect a fraud scheme committed by a vendor. 

 

Prevention Measures 

  • Check the vendor’s pricing structure. If it looks too good to be true, it probably is. 

  • Scrutinize invoices submitted by or on behalf of a vendor as regularly as possible. If you notice two invoices with similar invoice numbers, a fraud scheme is probably at play. 

  • Also, check if the invoices were created using Microsoft Excel templates. If they are, it’s a big red flag.

  • A vendor without a verifiable taxpayer identification number is very likely out to scam you. 

  • Run a background check on your new vendors to see if they are connected to your employees. Also, check if there’s any form of mutual relationship. 

  • Any vendor addresses that are a P.O. box typically denote some type of fraud.

 


HOW TO SPOT FRAUDULENT BEHAVIOR

 

  • Beware of a sense of urgency. Usually fraudsters will indicate that the funds need to be wired right away. These requests often ask the client to be contacted only through email.

 

  • Beware of business email compromise and phishing scams. Scams target companies that may make wire transfers to suppliers and businesses. Scams begin with a criminal sending a phishing email to a company which seems to be from a known entity. The employee clicks a link, or provides sensitive information, and the fraudster gains access to the employee’s email account.

 

  • Beware of senior executive spoofing scams. In this type of scam, a company employee will receive a transfer request via email from what appears to be a high-level executive. The domain will look very close to the company’s domain and appears to be an email from the CEO or similar company manager. The fraudster creates a sense of urgency and rushes the employee into making a quick decision to send the transfer before researching and verbally confirming the request.

 

  • Beware of overpayment scams. Fraudsters can send a check for more than the agreed upon amount of an actual vendor and then insist that the overpayment be wired back to them. Later, the check gets returned, leaving you liable for the entire amount.

 

  • Beware vendor spoofing scams. An employee receives an email or phone call from a trusted vendor requesting a change in payment instructions. Without due diligence and validation processes to confirm the request, the employee transfers the funds to the fraudster’s bank account. Usually these wire requests closely mimic a legitimate request that you’d typically receive from that supplier.



Bank of Central Florida is committed to helping all of our clients stay on top of the latest threats to your success. Whether it’s information about safeguarding from fraud or offering products and services to keep your business transactions secure, we’re here for you — so don’t hesitate to reach out with any questions.