Criminals see large companies as easy targets, quick hits
Now in its eighth year, the 2012
"Although attempted attacks still occurred in 2011, financial loss was avoided because companies have taken steps to eliminate vulnerabilities," said
Fraudsters aim for convenient targets of opportunity, especially big companies that handle many checks. The 2012 survey revealed that larger organizations were targeted more frequently than smaller ones (81 percent versus 55 percent) and with a 22 percent higher average loss. Industries with greater consumer access such as retail and insurance have fraud attack rates 15 to 20 percent higher than other industries.
More than 80 percent of companies surveyed employ best practices such as positive pay and daily reconciliations to mitigate fraud. When they do experience losses, it is often because they failed to comply with their own fraud policies.
"With the proliferation of payment options, fraudsters are constantly exploring newer and bolder ways to perpetrate fraud, making it necessary for treasury professionals to remain ever vigilant against these emerging schemes," said
The survey revealed a noteworthy vulnerability: payouts to check cashers (bank and non-bank) from holder in due course situations. Most organizations have aggressively pushed to achieve 100 percent electronic payroll to avoid this problem.
Additional key findings by payment type:
- CHECKS – Checks remain the payment type most vulnerable to fraud attacks with 62 percent incurring incidence of fraud and 26 percent of respondents indicating they have been hit by frequent check fraud attacks. Attacks typically spread out over the course of the year, but many (38 percent) cluster together.
- ELECTRONIC CHECK CONVERSION – Electronic check conversion services continue to experience a very low incidence of fraud (two percent), making this service a good choice in helping minimize instances of check fraud.
- ACH – Only 14 percent of organizations experience frequent attacks via ACH. As the least likely target of fraud, ACH remains one of the most favored payment mechanisms from a fraud control perspective.
- CARDS – The incidence of business card fraud continues to be relatively low, particularly on payroll and other benefit-related cards issued by companies to employees. Organizations need to maintain strict control over how, when and where their cards may be used.
For more information or to download the survey results, go to www.afponline.org/fraud
ABOUT THE SURVEY
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