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3 Costly Facts About Business Fraud

Jim Smith,

September 05, 2017


Now more than ever, regular monitoring of your checking account is needed to protect your account against fraud. On your personal account, it can be unnerving to uncover an unauthorized transaction. Luckily, on personal accounts, these transactions can be reversed, provided you call within 30-60 days of the transaction posting. However, the rules are different when it comes to business accounts.

Fact 1: Business Fraud must be Detected Within 24 hours to Prevent a Loss

For your business account, you must inform your bank of any unauthorized electronic, or ACH payment, within 24 hours to return the payment. After that time, the payment become more difficult to be recovered. While you can attempt a return of a corporate ACH payment after the 24-hour timeline, it will most likely result in a loss for your organization. A civil case against whomever falsified the payment may be an option, but it’s often difficult to track down or prosecute the fraudster.

We have discovered increases in online payments to utility, cell phone, or online retailers using company account numbers. Many online payment portals do not verify the user or do account verification with online payment enrollment. This can make it easier for a fraudster to use an unauthorized account number. If this happens to your business and you do not report the activity quickly, you could be responsible for multiple transactions amounting to thousands of dollars.

Fact 2: Counterfeit Checks can happen on Accounts with few Checks Written

People often dismiss the risk of counterfeit checks because they do not write many checks or they think that counterfeit checks do not happen in our community. Unfortunately, this is a myth. As payment activity continues to move to electronic channels, fraudsters are using blank check stock with account numbers stolen online. Every check you write includes your bank and account information, making it easy to access. And most individuals will not know what your company check normally looks like. In fact, the check may not even include the correct name, but will not be identified as fraudulent until detected by a fraud management system, like Positive Pay.

Fact 3: It’s Difficult to Manage Fraud by Yourself

Constant monitoring of your accounts is not only time-consuming, but it’s unrealistic. Vacations, busy days, and unexpected tasks can make even the most well-meaning employee miss a transaction. Luckily, services like Positive Pay make it easy to compare transactions against details you provide for checks or electronic payments. Rather than relying on individuals to spot errors, you receive an alert if the details do not match. This notice provides time to review or even return the item before the 24-hour deadline. Ready to get proactive in your fraud protection? We’re here to help. Learn more about Positive Pay or contact us to get started.

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This blog article is for informational purposes only, and is not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.