Impact of Fraud

Background:
Fraud continues to be a real challenge in the payment Industry - this from UK Finance’s 2022 Half year Fraud report: In the first half of this year, criminals stole a total of £609.8 million through authorised and unauthorised fraud and scams, a decrease of just under 13 per cent compared to H1 2021. The advanced security systems used by banks also prevented just under £584 million from being stolen. During the first half of 2022 criminals have continued to focus activity mainly on socially engineering their victims, usually with the intention of tricking them into authorising a payment to an account within their control (known as Authorised Push Payment (APP) Fraud).
Any reduction in fraud is welcome but the value remains at a very substantial amount and one that organisations should be very careful of.

Why is this important to businesses and corporates?
As is indicated above, one of the current large focus areas for fraudsters is to target consumers and organisations into Authorised Push Payment fraud by using social engineering to manipulate account holders to use incorrect payment details to send money to settle real invoices. “CEO” fraud is a case in point where beneficiary detail changes for supplier’s are made without proper call back checks.

Questions a business need to consider include:
• Are their controls over payee details for vendor/ invoice payment sufficiently strong?
• Are employees regularly informed on fraud risks associated with changing bank details?
• Does the organisation us payee/ bank account checking solutions such as Confirmation of Payee?