Maybe Hippocrates summed it best: “Desperate times call for desperate measures.” Ancient wisdom that sounds just as relevant today.
In times of a strained economy, people do things they may not normally do. Like fall prey to participating in a fraud or be coerced into being an accomplice for a get-rich-quick scheme. One of the latest techniques utilized by fraudsters is to troll social media, identify a disgruntled employee, and target them as a partner in crime for a cut of the money gained from the fraud.
Welcome to Business Email Compromise and internal fraud rolled into one. It’s also much easier for a criminal to entice a potential accomplice into falling for a scam that promises “easy” financial gain.
Because of the increased level of vulnerability with this type of fraud, awareness and education become even more important.
Educating yourself, your family, and your employees may help prevent you or your business from becoming a victim.
“At Regions, we provide a vast array of resources to assist you,” shares Jeff Taylor, head of Commercial Fraud Forensics. “From videos, white papers, podcasts, emails, articles, and links to supportive websites are all provided as tools to help you become more aware of the prominent risks and fraud vectors.”
Videos posted on the Regions YouTube channel and on regions.com are great resources to build awareness for business fraud schemes. The Commercial Banking and Treasury Management teams also host educational webinars on protecting your business from fraud. Regions hosts client fraud education events, as well as regular fraud education events through its Next Step program.
The Stop-Call-Confirm Approach to Preventing Business Fraud Schemes
One of the most important suggestions from Taylor and his team, also strongly suggested by the financial industry, is to establish an internal control to validate any request for a payment or change to a payment received via email.
“Staying up to date on the evolving fraud trends can go a long way in protecting your business,” said Brian Willman, head of Commercial Banking at Regions. “When you have a better understanding of what to look out for, you are better equipped to establish controls to avoid becoming a victim of business fraud schemes. The Stop-Call-Confirm approach is a great way to verify requests for payments or changes.”
- Take the time to Stop, and think about the request
- Call the requestor at a number known to you
- Confirm the intent of the legitimate requestor
Regions bankers reinforce the importance of verification with clients regularly. Recently, this vigilance paid off and prevented a significant fraud loss for a business. A client with Positive Pay with Payee Name Verification and ACH Alert set up on all of their accounts received an exception notification where the dollar amount, issue date and check number were correct, however, the payee name was changed.
This thorough review prevented a six-figure loss that could easily have slipped through.
“Our bankers remind clients to take all Positive Pay and ACH Alert notifications very seriously,” noted Taylor. “If they receive a notification, they must stop whatever they are doing and carefully review all details of the item presented.”
And if something slips through the internal verification processes at a client business, Regions bankers are also keeping a watchful eye on accounts, always watching for red flags.
“We recently had a case where a client almost became a victim of a business email compromise scheme and was contacted by the Regions Financial Crimes Unit Operations team who noticed an outgoing ACH credit transaction that was out of the ordinary in terms of amounts and designation,” said Randy Wilborn, Regions Treasury Management product manager. “The client was able to confirm that the transaction as fraudulent. Our FCU team engaged the Business Intrusion team in client services, who engaged ACH Operations team. That team was able to delete the transaction prior to it being released to the Fed, saving the client a potential six-figure loss.”
Staying vigilant and aware of potential business fraud schemes is increasingly important as criminals become more sophisticated.
The information presented is general in nature and should not be considered, legal, accounting or tax advice. Regions reminds its customers that they should be vigilant about fraud and security and that they are responsible for taking action to protect their computer systems. Fraud prevention requires a continuous review of your policies and practices, as the threat evolves daily. There is no guarantee that all fraudulent transactions will be prevented or that related financial losses will not occur. Visit regions.com/STOPFRAUD, or speak with your Banker for further information on how you can help prevent fraud.