Don’t let the rising tide of payment fraud overwhelm your business

By Christopher Chazin, SVP, Head of Treasury & Trade Products & Services, Commercial Banking

Payment fraud is a fast-growing business threat, according to the 2024 AFP Payments and Control Survey Report. In 2023, for example, an alarming 80% of surveyed organizations were hit by actual or attempted payment fraud attacks. That’s up 23% from 2022.

While this surge mostly affected larger organizations, such as those with annual revenues exceeding $1 billion, businesses of every size are vulnerable to this type of fraud. It includes the fraudulent use of checks, credit cards, electronic payments, and general fraud to solicit unearned payment, each requiring specific strategies to mitigate risks effectively.

Building a strong “human firewall”

The report’s findings are a warning that payment fraud is a persistent, ever-evolving threat. To combat it, organizations must adopt a multi-faceted approach to prevention - a combination of employee education, stringent controls, and technology protections. Unfortunately, the effectiveness of the latter two safeguards can be quickly undermined if a strong “human firewall” is lacking.

After all, perpetrators of payment fraud target unsuspecting employees with fake emails - phishing exploits - and bogus phone calls to bypass finance controls and IT security controls like firewalls and anti-virus software.

That’s why every organization should deploy training programs for new and seasoned employees - during their onboarding and at least once a year thereafter - to recognize and respond to suspicious and potentially fraudulent payments. Email phishing attacks can be hard to detect, even by cybersecurity professionals, who have been known to fall victims themselves.

Ongoing security awareness programs are also essential to foster a proactive, risk-minded culture that encourages vigilance and the reporting of suspicious activities. Both security training and awareness programs should have support and ongoing commitment from the highest levels of an organization.

The importance of controls and safeguards

TD Bank's approach to fraud prevention is multifaceted, encompassing a digital suite of services designed to mitigate risks and help businesses prevent payment fraud. Among our fraud solutions are two services that we recommend our commercial customers implement:

• TD Positive Pay: This service adds a layer of security by matching checks presented for payment against a business account to the checks issued by the business. Discrepancies in check details such as serial number, amount, and/or payee name will trigger alerts, allowing businesses to make informed decisions about whether to pay or return certain checks. Images of suspect items are provided online for reference and verification.
• ACH Fraud Control: These services are proactive protections to combat unauthorized Automated Clearing House (ACH) transactions, including ACH Positive Pay, which works similarly to TD Positive Pay for checks. By setting parameters for allowable ACH transactions through TD eTreasury, businesses can effectively safeguard their accounts with debit filters, ensuring that only authorized transactions are processed. You can also set up ACH Block Service, which will automatically return all debit and credit requests should an ACH item be submitted.

These TD Bank payment verification services operate in near real-time and are instrumental in protecting our commercial customers against check and ACH fraud.

Fraud prevention, a top priority

The integration of these services into TD Bank's fraud prevention framework reflects our commitment to leveraging cutting-edge technology and data-driven insights to help our customers stay ahead of the rising tide of payment fraud. By continuously monitoring fraud trends and adapting to new threats,

TD Bank not only protects our customers but also contributes to the overall stability and trust in the financial system.

In the ever-evolving landscape of commercial banking, fraud prevention remains a paramount concern for all financial institutions and their customers alike. TD Bank is positioned at the forefront of this battle against fraudulent activities and was recently awarded the 2024 FICO Decisions Award for Achievements in Fraud Management.

This recognition underscores TD Bank's dedication to safeguarding our customers' financial integrity through innovative fraud management solutions. In 2023, TD worked closely with FICO to help enhance our data-driven fraud detection and prevention measures. Together, we developed the TD North American Fraud Detection Platform. It integrates real-time customer and financial payments data to power advanced fraud-detection capabilities.

For businesses looking to fortify their defenses against fraud, TD Bank's services offer next-level safeguards. With the support of TD Treasury Management specialists and a comprehensive suite of tools, companies can navigate the complexities of commercial banking with confidence, knowing that their assets are well-protected.

We're here to help and will work with you to identify fraud mitigating solutions for your business, just stop by any TD Bank location or call 1-888-388-0408.

RESOURCES

• Click here for fraud tips to keep your business safe.
• Click here for fraud terms you might not know.
• Click here for tips to avoid payment fraud and cybercrimes.
• Click here for additional guidance on fraud prevention.

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