Payments Fraud Resource Center

Types of Fraud and What You Can Do

Fraud typically occurs when a client’s account is compromised through checking, ACH or wire channels. Fraudsters are motivated to commit fraud when they detect weakness in the security of information relating to a client’s account and tools to deter fraud are not being used.

Check fraud is the oldest form of depository account fraud and occurs in various ways. Counterfeit checks, altered checks and forged signatures on checks comprise the main categories for fraud.

Wire fraud occurs when someone other than an authorized individual performs a wire transfer to an account that is not intended as the recipient.

ACH fraud occurs when a client’s account is accessed for unauthorized ACH payments (debits).

Internet fraud takes several forms and is intended to intercept, view or redirect confidential information about the client and the client’s financial information in order to compromise accounts and commit fraud. The worst forms of internet fraud create situations where the client believes they are dealing with legitimate Web sites that are in fact fraudulent.

WHAT YOU CAN DO
Paper

  • Use high-security check stock
  • Securely store check stock and bank statements
  • Implement secure financial document destruction processes
Electronic

  • Use an online banking channel for treasury management needs
  • Convert paper payments to electronic delivery wherever possible
  • Establish policies regarding use of executive signatures on electronic documents
  • Ensure security tokens are collected and passwords are changed when an employee leaves the company
Internal Controls

  • Segregate duties
    —Making payments and reconciling accounts
    —Creating, approving and releasing wires
  • Monitor and reconcile accounts daily
  • Use online statements, reporting and reconcilement services to speed the reconcilement process
Online Security

  • Mask account and Tax ID numbers in correspondence
  • Use encrypted e-mail for confidential, non-public information
  • Maintain an awareness of the latest fraud trends such as phishingand malware

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Important News
Important News
AFP: Payments Fraud and Control Survey Results News Release

13th Annual 2012 Online Fraud Report
Learn the latest in online payment fraud trends, merchant practices and benchmarks.
Courtesy of CyberSource Corporation

Payments Fraud Information Resources
Download this valuable list of industry and government information-sharing resources on payments fraud.
Courtesy of Federal Reserve Bank of Minneapolis

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