Annually, we look forward to sending our ACH origination customers an update to help you most effectively participate in the area of faster payments. This year, we wanted to focus on business fraud and ways you can work to prevent it - and because it's such an important topic with widespread impacts, we wanted to share this message with all of our business clients.
What is business fraud?
Business fraud can often refer to crimes committed by employees or attacks committed against the business by fraudsters, sometimes pretending to be business associates.
Business fraud is a serious issue causing billions of dollars of losses to small and large businesses. It is important that any employee with access to online banking and payment resources know what types of fraud affects businesses today and remain alert.
FOUR TYPES OF BUSINESS FRAUD & STRATEGIES FOR PREVENTION
| Wire Fraud | ACH Fraud | Forgery | Email Compromise |
|---|---|---|---|
| WHAT IS IT? Wire fraud is a federal crime that uses the internet or other communication products to scam businesses out of money. Criminals determine which employees have wire authority and work their way into the businesses’ network to attack their systems and send out fraudulent wires. | WHAT IS IT? ACH fraud occurs when funds are stolen through the electronic funds clearing network. Criminals only need an account and a routing number to commit ACH fraud. An email prompting an employee to visit a website (which is infected) can allow criminals to withdraw funds from a business via ACH. | WHAT IS IT? Forgery can appear as falsified signatures on business records, checks, and other certified business documents. Whether stolen or lost, in the hands of a criminal, these documents may cost a business more than thousands of dollars. | WHAT IS IT? Email scams, also known as phishing, occur when fraudsters attempt to hack, or impersonate other business email addresses. These fraudulent emails look legitimate which allows the fraudsters access when opened or links are clicked. |
| HOW CAN I PROTECT MY BUSINESS? To combat wire fraud, businesses should protect their networks from malware; train employees to not click on emails and links from unknown senders; limit the number of employees with wire authority; and delegate dual control of duties. Businesses should also consider adding cybersecurity incident insurance to their coverage. | HOW CAN I PROTECT MY BUSINESS? ACH fraud prevention includes adding ACH fraud filter/block to your business account, limiting the number of employees with access, managing passwords, never clicking on a suspicious link, designating segregation of duties, and never sending financial information or log in credentials via email. Additionally, never accept changes to banking information for ACH payees strictly based on emails or a single call from an unknown employee of the vendor – complete due diligence measures first. | HOW CAN I PROTECT MY BUSINESS? It is strongly recommended that companies mandate dual control methods so that multiple people are handing the issuing of checks and review of bank statements. | HOW CAN I PROTECT MY BUSINESS? Do not open emails from unknown senders, do not open emails that look suspicious (with misspelled words), and do not click on links from unknown senders or in suspicious emails. Email scams can cause businesses to lose thousands of dollars. |
ACH clients, please note: For the most updated information on NACHA operating rules and any upcoming changes, see the NACHA website.
Updated 05.13.2024.