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Understand the Risks of Payment Fraud - Prevention and Protection

Bethany Arnold
Vice President, Cash Management Officer
[email protected]
(585) 419-0670 x50645

While high technology crimes make headlines, good old-fashioned checks are the largest vehicle for payment fraud according to Associates for Financial Professionals (AFP) Payment Fraud Survey ( AFP stated 74% of organizations who were targets of payment scams were targeted via check fraud. Checks provide an easy way to replicate vital account information such as account, routing, and check sequence numbers. It’s easy for fraudsters to obtain this sensitive account information by stealing a check from your check register at the office, finding paid or canceled checks that were not securely disposed of, or a check found in a mailbox intended to pay a vendor. Common types of check fraud include a valid check that’s payee names and dollar amounts are altered, counterfeit checks drawn on real accounts or checks obtained from opening a false account based on fraudulent ID, and forged checks which are falsely endorsed.

Fraud Prevention Solutions

Unlike paper checks, automated payment processing offers payables to be made digitally from bank to bank. Using automated banking tools such as ACH Origination, Online Bill Pay, and Purchasing Card can help decrease the number of checks paid and mitigate the risk of account information from being exposed. Replacing paper checks with secure electronic options can help eliminate error-prone manual processes, improve controls to safeguard sensitive information, and provide clear visibility to better supervise activity. Forecasters stated electronic transactions will replace 25% of check payments in the next 10 years (

Fraud Protection Solutions

The use of fraud monitoring tools like Positive Pay are currently the most effective means against check and ACH payment fraud. With Positive Pay, your bank only pays the checks or ACH debits preauthorized in your Positive Pay file. Any unauthorized checks or ACH debits are not paid, and you are notified of a suspect. Positive Pay helps businesses detect suspicious transactions, reduce errors and safeguard account assets.

CNB Offers Multiple Fraud Prevention Service Options to Choose From:

  • Check Positive Pay - Upload a file containing your issued check and the system will compare items presented for payment against the submitted file. Any discrepancies of check number and dollar amount will be identified and presented for verification before processing the transaction.
    • Payee Match - Compares the submitted payee name along with the check number and dollar amount on the check image.
  • ACH Positive Pay - Manage your ACH debits and credits posting to your business account using filters. This service allows you to pay or return ACH debits that do not match an existing pre-authorization.
  • Reverse Positive Pay - Monitor your paid checks with a daily report and provide a return decision for any check determined to be unauthorized.
  • Full Account Reconciliation - A reconciliation report of paid items to the check issued record that provides comprehensive information.

Contact Bethany today to learn more about CNB’s Cash Management Solutions and how they can help improve your organization’s defenses against payment fraud.

This material provided by Bethany Arnold.