Payments fraud touched a new high last year, with almost 80 per cent of all companies reporting at least one case of payments fraud in 2017, according to the 2018 AFP Payments Fraud Survey.
The main message from the survey results is that financial professionals must remain alert to payment fraud, which continues to rise and focuses on cheque fraud in the US, while criminals continue to use business email compromise (BEC) scams to trick unwitting employees or suppliers into initiating a fraudulent transaction.
Three-quarters of the survey's respondents said they were affected by cheque fraud, more than fraud for any other payment type. Fewer than half (48 per cent) were affected by wire fraud and 30 per cent reported corporate card fraud. Online phishing attacks and scams were prevalent and 77 per cent of the respondents reported they had been targeted by criminals using business email (BEC scam) to initiate a fraudulent payment. BEC scams mainly targeted wire payments (54 per cent) and cheque payments (34 per cent). The majority of firms have, however, implemented measures to prevent BEC scams.
The survey was conducted in association with JPMorgan and the bank's managing director of treasury services, Bob St Jean, commented: “The fraud survey serves as an important resource in understanding the potential risks within the payments industry. With more than three-quarters of companies experiencing fraud in 2017, it is important that businesses take preventive measures by educating their employees and implementing processes to prepare and protect their infrastructures from cyberfraud.”
Some of the survey's main findings include:
- 65 per cent of payments fraud is committed by individuals outside the organisation;
- 67 per cent of payments fraud is discovered by treasury staff;
- 92 per cent of organizations report that payments fraud attacks collectively cost 0.5 per cent of the organization’s annual revenue;
- 47 per cent of organizations discovered fraud less than two weeks after the incident occurred.
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