Payments Fraud Rises as Tactics Evolve


The Association for Financial Professionals’ 14th annual Payments Fraud and Control Survey asked finance professionals from across the country about their experiences with fraud and the strategies they’re adopting to protect themselves.

FRAUD CONTINUES TO RISE

Seventy-eight percent of finance professionals report that their companies were victims of payments fraud in 2017. This is the largest share on record, up from the previous high of 74 percent in 2016.

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71 % 68 % 61 % 60 % 62 % 73 % 74 % 73 % 2009 2010 2011 2012 2013 2014 2015 2016 2017 78 %

In the US, Checks Are Still Most Vulnerable

In the United States, checks are still the most targeted payment type, likely due to their extensive use for business-to-business transactions. Advances in imaging technology also enable fraudsters to forge authentic-looking checks relatively easily.

FRAUD BY PAYMENT TYPE

 

Check

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75 % 71 % 82 % 74 % 2016 2015 2014 2013 2017 77 %
 

Wire Transfer

Wire Transfer icon
46 % 48 % 13 % 48 % 2016 2015 2014 2013 2017 27 %
 

CORPORATE/
COMMERCIAL
CREDIT CARDS

32 % 39 % 43 % 30 % 2016 2015 2014 2013 2017 34 %
 

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Email Schemes Grow—and Evolve

The incidence of business email compromise (BEC) fraud has steadily increased in recent years. BEC scams typically trick employees into making fraudulent payments—although as criminals evolve to request personally identifiable information and employee W-2 forms, they’re not always seeking a transfer of funds.

77 percent of organizations were exposed to BEC scams in 2017, compared to 74 percent in 2016 and 64 percent in 2015

34 % 15 % 54 % WIRETRANSFER CORPORATE/COMMERCIALCREDIT CARDS CHECK 77 %


77 percent of organizations have also implemented controls to help prevent BEC, including:

Education and training of employees

Periodic test emails to teach employees to identify suspicious messages

Validating fund requests by calling requestors at telephone
numbers on file


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HOW ARE ORGANIZATIONS PROTECTING THEMSELVES?

Here are a few tactics finance professionals are using to protect their companies from increasingly sophisticated criminals.

90%use Positive Pay to verify the authenticity of checks
75% perform daily reconciliations on check activity
69% perform daily reconciliations on ACH transaction activity
68% segregate checking accounts
 
 

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