Common Business Fraud Scams

Fraudsters use compromised email accounts to trick employees into changing payment details on vendor invoices or employee direct deposit. They can impersonate an executive with an urgent wire who is unavailable to confirm the details.

Best Practice: Always confirm new or updated payment details calling a known phone number. Don’t rely on a phone number in the email or an inbound call from what appears to be a known number. Phone numbers are easily spoofed, and voices can be impersonated using common AI tools.

Cybercriminals gain access to a company’s bank accounts and initiate unauthorized transactions.

Example: Hackers use stolen credentials to access a business’s online banking and transfer funds to their accounts.

Best Practice: Use strong, unique passwords, regularly monitor account activity, and employ advanced security measures like encryption and fraud detection software.

Fraudsters send deceptive emails to trick recipients into revealing sensitive information or downloading malware.

Example: An employee receives an email that appears to be from a trusted source, asking them to click a link and enter their login details.

Best Practice: Train employees to recognize phishing attempts, use email filtering software, and encourage reporting of suspicious emails.

Just as with other types of fraud, criminals attempt to pose as a person with whom you have gained trust; for example, a relative, an executive at your company, your bank, an attorney, or a government agency. They send a fake request instructing you to wire funds immediately using payment instructions they provide – and they reiterate the urgency of their request. This is meant to pressure you into making a mistake that is difficult to correct. Once the money has been wired, it is nearly impossible to recover the funds.

Fraudsters commonly steal checks from the mail or obtain account details creating altered or forged checks to steal money from businesses.

Example: A counterfeit check is created using a business’s account details and cashed by the fraudster.

Best Practice: Use secure check printing methods, reconcile bank statements regularly, and consider electronic payment methods to reduce reliance on checks. Utilize fraud prevention tools offered by your bank.

Recently, banks across the country have been experiencing a drastic increase in issues connected to mail fraud. The most common occurrence is business checks being altered after being stolen from the mail or fraudsters making a counterfeit check with the same account information on it. A business’ cash flow can be greatly affected after falling victim to mail fraud so it is important to closely monitor your business’ accounts.

To avoid falling prey to mail fraud, keep these tips in mind:

• Monitor your account closely so you can identify if an original item did not clear or if it’s payable to a different payee (which could be the result of an altered check). Don’t wait for a vendor to reach out and say they didn’t receive a payment.
• Don’t mail checks from your business location or by using the outdoor blue collection boxes. Instead, mail them from inside the post office.
• If your vendor tells you they did not receive payment, but you can see the check has cleared your account, contact the bank as soon as possible to start a Forged Endorsement claim. The payee of the endorsement that was forged will have to sign a Check Fraud Affidavit. These claims must be sent to the bank that negotiated the check and can take some time to get a response back.
• Contact your local bank representative to discuss fraud prevention services.