The festive period is undeniably a hectic time of year. According to the FCA, many people are concerned about being able to afford Christmas and resort to borrowing money to cover the costs. This also leads to a rise in fraudsters looking to take advantage of people’s desperation.
However, it’s not just parents with young children who are concerned with fraud this Christmas.
According to a study conducted by Trustmi, 75% of business leaders admitted to feeling more concerned about business payment fraud this season compared to other times of the year. In addition to this, 63% admitted that their businesses have experienced some form of business payment fraud during the Christmas period.
A combination of increased transactions and workload, business initiatives and activities, distracted consumers, and sophisticated cybercriminals creates a perfect storm for fraudulent activities this time of year.
What is Business Payment Fraud?
Business payment fraud – also known as invoice fraud or corporate payment fraud – is committed when fraudsters exploit vulnerabilities in a company’s financial systems and processes with the goal of illicitly obtaining funds or manipulating financial transactions for personal gain. Businesses and companies of all sizes can be targeted, however certain sectors can be more at risk, such as real estate, retail and financial services. Any business that deals with large amounts of money and has access to public records are at risk.
Fraudsters employ various techniques and tactics to commit business payment fraud. One common tactic is phishing – sending payment requests from unauthorised or malicious email addresses. Fraudsters also utilise social engineering to manipulate their victims, such as pretending to be a person of authority in the organisation to trick employees into sending money quickly. Fraudsters will also resort to creating counterfeit invoices and payment requests. However, business payment fraud can also be caused by simple human error, such as the wrong payment amount gets sent to a false account due to internal mistakes.
Fraud Prevention Strategies to implement this Christmas
In order to avoid falling victim to fraud, it is essential to understand the latest fraud schemes, how they are implemented, and how they can affect your company. If you think your business may be a potential target for fraudsters, then the next step is to implement cybersecurity strategies to prevent fraud attacks. This can mean using anti-fraud tools that can detect fraud and protect business accounts from unauthorised transactions. It is also recommended to implement basic fraud prevention techniques, such as dual controls, and segregation of duties so no single person has unrestricted access to business accounts.
Finally, you can also conduct refresher training on company policies and procedures on security and reporting fraud, so all members of staff know what to look out for.
TenIntelligence Thoughts
As businesses prepare for the festive season, it is important to stay vigilant and take the essential steps to safeguarding themselves against business payment fraud. Be sure to implement a comprehensive cybersecurity strategy and educate your employees and customers on the associated risks to ensure a safe experience.
If you think you or your business has experienced business payment fraud, do not hesitate to contact us at info@tenintel.com.
Written by
Rachael Legg | Senior Analyst