Identifying and Preventing Bank Fraud at Work

If you receive an email from your CEO asking you to wire money, beware. It could be a phishing email from a criminal trying to steal money from your business. Email phishing scams and business identity theft are on the rise.

This year, JP Morgan took a survey of businesses across the country to find out how prevalent bank fraud was in 2018. The results were sobering. The survey found that 82 percent of companies were targets of payments fraud last year.

Small business owners are often under the misconception that their businesses are too small to be the target of payments and bank fraud. Unfortunately, this attitude makes smaller businesses a great target for criminals, as owners are unsuspecting and may not have taken proper security precautions. Whether your business is large or small, bank fraud is a serious threat to your company. Here are two common types of fraud and what you can do to prevent them.

Internet Phishing Attacks on Businesses

Internet phishing is the attempt to illegally acquire sensitive information from an individual or business. Sensitive information includes bank information, credit card details, and even account usernames and passwords. A phishing scam often begins with a threatening email that claims your account is somehow compromised. To resolve the issue, the email urges you to click on a fraudulent link and enter sensitive information.

Approximately 80 percent of companies experienced an attempted Business Email Compromise, or BEC, phishing scam in 2018. Seventy percent of these schemes involved check fraud. Phishing scams are increasingly sophisticated, especially when they target business executives.

A common tactic is for fraudsters to send a spoof email from a CEO or president to a company’s financial director with an urgent request to wire funds. The email may include the CEO’s real email, email signature, and possibly a headshot. However, the email contains fraudulent wire instructions. Believing the email to be legitimate, the financial director may complete the instructions. Since it’s a wire, funds are pulled immediately and irrevocably.

To prevent your company from becoming a victim of a BEC scam, consider creating a dual-control wire procedure. This requires multiple employees to authenticate and fulfill a wire request. Also consider requiring employees to call the CEO or sender of the email to confirm wire and other banking requests.

Business Identity Theft

Identity theft has been a hot topic for years. Individuals are common targets for identity theft, but businesses can become targets, too. Business identity theft may occur when a criminal gains access to your business’s credit card or banking information. This may happen during a physical burglary or over the internet if your network is not adequately protected. Identity theft may also occur if a fraudster uses your company name and information to open credit cards in your name.

To prevent business identity theft, maintain strong network security policies and procedures and protect all of the data your company stores, including customer data. Always shred credit card statements, bank statements, and ATM receipts. Don’t give your credit card number out over email or to someone who’s called you. Ask your bookkeeper to reconcile your bank statement monthly, and run your business’s credit report every year to look for potential fraud.

Platinum Bank’s Measures to Protect Business Customers from Fraud

Platinum Bank protects customer accounts and data on all fronts. We operate in a secure environment to maintain a safeguard on your account, from our team of tellers to the CEO. Platinum Bank is committed to educating customers on the payments fraud threats their businesses face, including BEC scams and business identity theft. We help our customers set up dual-control procedures to approve wire transfers and conduct annual reviews of customers’ accounts payable systems to prevent future fraud.

The bank also offers Positive Pay, a check matching and ACH debit-matching service. Enrolled customers provide us with a file when they complete check runs that allows us to match check or ACH debit information with the information provided in the file. If the dollar amounts differ, we alert our customers, giving them a chance to stop check fraud attempts before they post to their account.

Platinum Bank is committed to your security and privacy. For more information on bank fraud and how we prevent it, or if you believe suspicious activity has occurred on your account, email Vice President of Cash Management Zach Busch or call him at (651) 332-5215.