Five rapidly growing types of financial fraud (and four quick and easy solutions)

Types of fraud

Here are 5 types of financial fraud that are most likely to affect your business:

• Check washing fraud. This involves a criminal stealing a legitimate check that you have mailed to another party and changing the payee’s name and dollar amount on it, then fraudulently depositing the check. These checks are often either washed in chemicals to remove the ink, or scanned, altered, and printed.
• Counterfeit checks. This involves a criminal stealing a legitimate business check, then using the information on the check to create counterfeit checks that look identical to your legitimate checks.
• Employee fraud. This involves an employee who has access to your business’s accounts writing fraudulent checks. This generally starts with small amounts that are less likely to be detected, then escalates.
• EFT (Electronic Funds Transfer) fraud via email. This often starts with a phishing email that goes undetected. An employee will inadvertently click on a malicious link in an email, not realizing the email is fraudulent. This gives a threat actor access to your email systems, and they send out payment instructions to your customers that appear to originate from your business email account. The customer then sends payments owed to your business, but they are diverted to a fraudulent bank account. You can also become a victim of this type of fraud if you receive payment instructions via email from a vendor and send payment to a threat actor, unaware that the email was fraudulent.
• EFT fraud via online banking fraud. This also often starts with a phishing email; however, the threat actor installs a remote access trojan onto your system, allowing them to log into your online banking programs and email system. They then e-transfer funds out of your business accounts. Multi-factor authentication via email does not protect against this since the threat actor has control of your email as well.

This may seem like an overwhelming exposure to financial loss, but there is a quick and easy way to help prevent your business from becoming the next victim: Implementing payment controls.