Commercial Payments Fraud is on the Rise: Here’s How to Protect Your Business

Commercial payments fraud is a rapidly escalating threat across the nation, driven by the increasing sophistication of cybercriminals and the transition to faster payment methods.

Nationally, the trend shows an alarming rise in both the frequency and financial impact of attacks. In 2024, nearly 79% of organizations reported being victims of attempted or actual payments fraud. The Federal Bureau of Investigation (FBI) reported that Business Email Compromise (BEC) scams alone led to billions in reported losses, making it one of the most financially devastating cybercrimes.

Despite the shift to digital payments, paper checks remain the most frequently targeted payment method, often through sophisticated forgery or mail theft. However, wire transfers are now the most vulnerable payment type targeted by BEC, where fraudsters impersonate executives or vendors to trick employees into making fraudulent payments. The growing use of Artificial Intelligence (AI) by criminals to craft hyper-realistic phishing emails and deep-fake communications poses a new, major risk.

Fraud in the Sarasota Area

The Sarasota area has experienced the impact of these national trends, often ranking highly for fraud-related reports in the country. In 2022, the North Port/Sarasota/Bradenton area was ranked #3 in the country for fraud reports. Local incidents highlight vulnerabilities in commercial accounts, particularly regarding electronic transactions like ACH (Automated Clearing House).

How to Protect Your Company…and Your Customers

Banks and other financial institutions are already tasked by regulators with following certain Know Your Customer (KYC) protocols to prevent financial crimes, such as money laundering, but the increasing prevalence of commercial fraud highlights the need to do more.

Investing in advanced detection tools such as biometrics can be costly, but luckily there are steps to take that require very little or no investment, such as:

• Ongoing and mandatory fraud awareness training to help employees recognize common schemes and suspicious behaviors and understand the importance of following all protocols all the time.
• Routinely reviewing internal controls and updating processes to reflect the evolving risk environment.  
• Implementing dual authorization processes for individuals with account access, payments responsibilities and other financial roles.
• Validating every customer and vendor transaction request with a phone call to the number on record. Being asked to call a different number should always be a red flag.
• Making sure your accounts are reviewed daily for any unusual transactions such as micro credits and debits from would-be fraudsters.
• Ensuring monthly reconciliation of commercial accounts.
• Taking advantage of built-in industry detection services such as Positive Pay and ACH Blocks, which are critically important in fraud prevention.

Your Banking Partner Can Help

Financial institutions also play a role in ensuring their customers are aware of common fraud schemes and that they understand how to help mitigate the risk. Maintaining a close relationship with your banker so they understand you, your business and your transaction habits can go a long way toward catching fraud early.

It is equally important to look for a financial institution that challenges  you to think critically about your processes so that you know they are as airtight as possible. Your financial institution should encourage you to:

• Enable receipt of fraud alerts when there is suspicious account activity;
• Enable system notifications for when account details have been changed;
• Utilize multi-factor authentication; and
• Confirm the authenticity of vendor payment change requests by calling the vendor at the number on record.

It is okay to stop, hit pause and double check the authenticity of a request – no matter who it is from. Your company’s security depends on it.

Kevin Gillen is Market Executive at Synovus Bank serving Central Florida and the Gulf Coast.

Aubrey LaBoda is Executive Director and Head of Treasury Management Sales at Synovus Bank.