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2023 AFP
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Payments Fraud and Control Report | www.AFPonline.org 21
CONCLUSION
There are clear signs that payments fraud
is abating. After record levels of fraud in
both 2018 and 2019 – peaking at over 80
percent – the share of organizations that
were targets of attempted/actual payments
fraud has been on the decline since. Checks
continue to be a prime target for criminals, but
with the declining use of checks – and very
eective tools to stop check fraud – fraudsters
have been having less success. According to
the 2022 AFP® Electronic Payments Report,
33 percent of organizations used checks
for business-to-business payments in 2022,
while in 2019, 43 percent of companies did
so. Because many organizations are unable
to eliminate the use of checks completely,
fraudsters continue to be able to use checks
to target organizations, although perhaps to a
lesser extent. Unfortunately, criminals are not
easily discouraged; advanced software and
social engineering enables them to attempt
payments fraud through other payment
methods such as wires and ACH payments.
Emails are frequently used to inltrate
company networks. In the current business
environment, employees are likely physically
distanced; consequently, verbal verication of
payment requests become more challenging.
Unless formal systems are in place and
ingrained in employees, fraud can often
occur. Business leaders have made training
and education focused on detecting phishing
attempts a priority for employees. Indeed,
many organizations do not restrict training to
just the nance teams, but instead require that
employees throughout the entire organization
be cognizant about fraud attempts via email
and be able to identify them. Employees who
inadvertently open emails multiple times which
are either actual fraud attacks or simulated
phishing attempts are reprimanded, and
in some extreme cases may be terminated
from their jobs. Despite extensive measures
implemented to prevent Business Email
Compromise, it continues to be one of the
primary sources of fraud at organizations.
The share of organizations experiencing
corporate/commercial credit card fraud
increased 10 percentage points, from 26 percent
in 2021 to 36 percent in 2022. This uptick is
similar to the incidence of credit card fraud
reported prior to the COVID-19 pandemic in
2019 – 34 percent. As a consequence of the
pandemic, organizations reduced workforce,
furloughed employees and trimmed
discretionary spending by restricting travel. The
use of corporate/commercial credit cards also
decreased, resulting in fewer card transactions
and, therefore, less fraud via that payment
method than was reported in 2020 and 2021. As
employers are recruiting again and organizations
have eased restrictions on travel and other
discretionary spending, corporate/commercial
credit cards are being used more extensively,
resulting in greater incidence of fraud being
reported via those payment methods.
Call backs, daily reconciliations and verbal
verications are methods many organizations
are using in their eorts to minimize the
occurrence of fraud via payment methods.
Treasury and nance leaders are increasingly
reaching out to banking partners for guidance
in reporting and managing fraud. Depending
on the extent of the fraud, practitioners are
also reporting fraud to police and other law
enforcement agencies.
In the past, actual nancial losses from
payments fraud attacks were not damaging;
that continued to be the case in 2022. However,
this is not a reason for companies to lose focus
on preventing fraud. While loss of condential
and personnel information does not directly
impact an organization’s bottom line, extensive
eort and resources are required to resolve
such situations.
It is evident that the steps business leaders
are taking to prevent fraud are having success.
However, historical payments fraud survey data
show dierent types of fraud emerge in the
wake of such success. Fraudsters are relentless
and will continue to target organizations and
any vulnerable payment networks. Therefore,
treasury leaders will want to ensure that they
are prepared for the next type of fraud that is
in the works. It is vital that treasury and nance
professionals stay ahead of the perpetrators
so that fraud attacks do not interrupt business
operations and organizations’ nancial losses
remain at a minimum.