Guest Post: Don't Become a Statistic

There is an insidious quality to payment fraud. Your company's profitability is compromised, your brand is jeopardized, your personnel’s time is consumed with remediation rather than productive work, and your business is at risk of failure. The 2022 Association for Financial Professionals Payments Fraud and Control survey¹ reports that 71% of organizations reported having been victims of payments fraud activity in 2021. Soaring payment fraud poses too great a risk to businesses for leaders not to adopt the most vigilant stance possible.

So where is the lion’s share of fraud-related financial losses coming from? Paper checks.

The importance of assessing whether business departments can withstand a fraudulent attack has never been greater. There are many types of payment methods that can be hacked by skilled fraudsters, but checks are vulnerable to fraud because they contain valuable information that can easily be forged or stolen.

Check fraud rose 106% because of the pandemic while the number of checks written only increased by 8%². Among the causes experts cite for this staggering rise in check fraud were social media, mail theft, new accounts scams, ageing fraud prevention technologies, and the end of stimulus checks³.

Check fraud isn’t a new era phenomenon. Attempted check fraud nearly doubled from 2016-2018 to $15.1 billion and represented 60% of fraud attempts against U.S. bank deposit accounts⁴. Even worse, successful check fraud attempts comprised 47%, or $1.3 billion, of banks’ fraud losses, up from $789 million in 2016.

Learn more! A Spotlight on Fraud and AP Challenges in the Construction Industry

Despite fraud vulnerability, corporations still love writing checks. It remains the #1 payment method for business-to-business (B2B) transactions. As recently as 2020, 42% of companies used checks for B2B payments⁵.

If your organization depends on checks, here are some tips for preventing fraud from impacting your bottom line:

• Secure your paper checks: Employees and criminals with inside access to your facilities may search for and find your checks.
• Never write checks in pencil or removable ink: Fraudsters seize the opportunity to erase and rewrite checks, so opt for a black gel pen, which is the most permanent pen ink. This prevents “check washing,” the term used to describe the removal and changing of your check figures and information.
• Always specify the check recipient: Complete every section of your checks to ensure criminals cannot fill out any additional information.
• Always use security envelopes: Security checks hide sensitive information from anyone going through sealed mail looking for checks. This extra layer of protection can prevent many fraud attempts.
• Checks should never be mailed from your business or home: Often, checks are stolen after they are mailed and subsequently cashed by fraudsters. It may be convenient to send a check directly from your business or home, but dropping a check at the Post Office lowers your chances of a fraudster intercepting and cashing it. Regardless of their lockability, do not use outside mailboxes because thieves can get into them. You can also avoid fraud by handing a check directly to a mail carrier if you cannot make it to the Post Office.
• Check for suspicious activity in your accounts: Vigilance must continue even after the check is mailed. Monitor bank accounts and report any suspicious activity.
• Consider using Positive Pay: This automated cash-management service is effective when used by businesses to deter check fraud. Banks use Positive Pay to match the checks a company issues with those presented for payment. Suspect checks are sent back to the issuer for examination.

Labor shortages and high staff turnover within business and finance offices continue to add to the stress associated with payments fraud. By securing how you pay your vendors, you can alleviate some of that worry. Besides saving you money, Paymerang's world-class automation solution helps protect your bank accounts from fraud as well as eliminate the costs associated with paper checks.

Paymerang partners also benefit from being paired with a payment solution provider that offers white-glove services. Paymerang’s internal security teams each prevent hundreds of fraud attacks against their clients, saving them millions of dollars each year.

Visit www.paymerang.com to learn more about AP automation, and contact Matthew Kirkpatrick, VP of Manufacturing at mkirkpatrick@paymerang.com.

¹2022 AFP: Payments Fraud and Control Survey

²Jake Emry, Nice Actimize Solutions fraud expert

³ Frank on Fraud: Check Fraud is Booming Again in a Post-Pandemic US

⁴American Bankers Association’s 2019 Deposit Account Fraud Survey Report

⁵2020 AFP Payments Fraud and Control and Control Survey