A recent article in Supply & Demand Chain Executive on Fighting Corporate Payment Fraud noted that nearly three-quarters of organizations experienced payment fraud in 2008. While the typical loss was only $15,200, some organizations experienced fraud that was orders of magnitude greater, and if you’re a small business, $15,200 could be the difference between paying two employees this month and not.
So what can you do? Given that the most common type of fraud is check fraud (with over 90% of the organizations who suffered fraud being attacked with check fraud), the second most common is credit and debit cards, and the third is ACH payment fraud, one thing you can do is implement a comprehensive defense against payment fraud by improving your internal controls and utilizing bank solutions available to you. For example, in addition to the paper, electronic, and online security controls that you can institutionalize, many financial institutions now offer payment fraud protection solutions that include debit blocking, payee verification, and post-no-check solutions. It won’t address every type of fraud, but if it prevents you from losing a hundred grand for a few bucks, it’s worth it.