“Imagine one of your employees is walking into work one morning and stumbles across a jump drive labeled ‘Q3 layoffs’ in the parking lot,” said Randy Wilborn, Regions Treasury Management product manager. “They badge into the facility and immediately insert the drive into their laptop, unknowingly releasing a malware virus onto your company server.
“With each email that employee sends, the virus infects more computers and more systems within your business. Each keystroke is sent back to an invisible criminal who is waiting for just the right information to come across to giving them everything they need to withdraw thousands from your financial accounts.”
This is one of many scenarios that have occurred in real life, resulting in financial losses to business across the U.S.
Amid a global pandemic in 2020, new avenues for fraudulent activity continue to impact businesses and consumers alike. According to the Department of Justice, enforcement actions taken during the global health crisis are at historic levels. In March 2021, the agency shared an update on criminal and civil enforcement efforts to combat COVID-19 related fraud, including schemes targeting the Paycheck Protection Program, Economic Injury Disaster Loan program and Unemployment Insurance programs.
In an effort to help educate business clients on mitigating the growing risks of fraud, Regions Bank’s Commercial Business Solutions team began hosting client webcast events. The most recent event on Protecting Your Business from Fraud featured experts from Regions Treasury Management and Regions Financial Wellness. The key focus was on addressing the two biggest questions keeping business owners and leaders up at night:
- What are the ways business fraud can happen?
- How can I protect my business and myself from fraud?
Wilborn kicked off the event with a recent overview and real-life examples of growing trends in business fraud.
There is a 50% chance you could be a victim of fraud. There were 467,000 complaints in 2019, $3.5 billion in losses, frequently due to non-payment/non-delivery scams in action.Tamicalyn Foster, Financial Wellness relationship manager
Tamicalyn Foster, Financial Wellness relationship manager, shared these sobering statistics around the prevalence and impact of business fraud. “There is a 50% chance you could be a victim of fraud. There were 467,000 complaints in 2019, $3.5 billion in losses, frequently due to non-payment/non-delivery scams in action,” Foster noted. “According to The Association of Certified Fraud Examiners, fraud loss on average is 5% of annual business revenue.”
Check fraud continues to increase as these are the most vulnerable financial instruments. Additionally, the threat of dishonest employees remains a contributing factor to business fraud. Bookkeeper fraud is one of the most difficult to detect, often going on for up to 18 months. The longer fraud goes undetected, the greater potential financial loss.
Foster said there are steps businesses can take to protect themselves from bookkeeper fraud.
“Timely reconciliation of accounts is important to spot abnormal activity,” Foster noted. “Immediately placing a stop payment on checks that have been lost or stolen is a simple task to prevent loss. Consider converting paper payments to electronic payments for greater security. When paper payment items are used, ensure they are stored and destroyed securely. Additionally, consider using a tool that shares information with your bank on the checks (or ACH) you’ve written and matches them up when they are received for payment.”
Education remains an important component to mitigate the risk of business fraud. When reviewing business controls and fraud prevention strategies, these are some questions to ask. For example, is your business
- Transferring funds securely?
- Losing revenue to fraud?
- Keeping company information private?
- Aware of the latest fraud trends?
- Receiving phishing emails or malware attempts?
- Are your vendors legitimate?
- Certain internal controls are strong?
Educating employees and associates around fraud is also tantamount to successful fraud mitigation. As the brainchild of Regions Commercial Business Solutions and Regions Financial Wellness team, these fraud education events also highlight opportunities for businesses to engage with the Regions team to provide education program events to business clients.
Regions Next Step offers guidance, tools, and resources for everyone from entrepreneurs to small business owners to those managing large organizations. With resources such as business calculators, employee financial wellness seminars, podcasts, and webinars, Next Step for Business provides a wide range of resources designed to help make smarter, more informed business decisions while empowering you to achieve personal and professional goals.
“We received great client feedback from attendees, all of whom were appreciative with the fraud information provided during recent webcasts,” noted Georgia Hendricks, Regions Financial Wellness relationship manager. “Having someone like Randy sharing real-life examples of fraud really helps clients understand the importance for fraud prevention.”
For more information on fraud prevention, visit regions.com/stopfraud and check out these recent articles from Doing More Today:
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.