Payments Fraud Activity Surged in 2018

According to the Association for Financial Professionals’ 15th annual Payments Fraud and Control Survey, payments fraud is becoming increasingly pervasive. Fraudsters are highly focused on infiltrating payments technology. While technology advancements can optimize and simplify processes, they can also provide a means for perpetrators to attack payment methods, commit financial crimes and inflict extensive damage. Learn how businesses are protecting themselves.
APR 19, 2019

Payments Fraud Sets Record High for Third Year Straight
The last four years of the survey have recorded a dramatic increase in payments fraud activity. Last year saw the highest rate on record, with 82 percent of financial professionals reporting that their companies were targets.

Larger Organizations at Higher Risk of Attacks

Experienced Payments Fraud Attacks in 2018

69%
Annual Revenue Less Than $1 Billion

87%
Annual Revenue At Least $1 Billion

Check Fraud Drops Slightly, but ACH Fraud Increases
Though checks and wire transfers continued to be the largest targets for fraud, the percentage of these scams decreased. On the other hand, fraudulent ACH debits and credits increased—an indication that fraudsters are developing more sophisticated attacks, as ACH transactions are often more difficult to compromise.

Email Scams Grow More Sophisticated
Business email compromise (BEC) targets businesses and individuals responsible for initiating payments. Eighty percent of organizations were exposed to BEC scams in 2018—the highest number on record.

BEC tactics continue to evolve, but respondents reported the following common attacks by fraudsters:

81% Using spoofed email addresses to pose as senior executives directing a transfer of funds

44% Impersonating vendors in emails, directing payments based on authentic invoices

33% Pretending to be other third parties in emails, requesting changes in bank account, payments instructions, etc.

Other ways financial professionals are protecting their companies include:

88%
use Positive Pay to verify the authenticity of checks

72%
segregate accounts

68%
perform daily reconciliation of check activity

65%
perform daily reconciliation of ACH debits