Payment fraud is an escalating threat that businesses must take seriously. According to the 2024 AFP Payments and Control Survey Report, 80% of surveyed organizations experienced actual or attempted payment fraud in 2023, a significant 23% increase from the previous year. While larger organizations, particularly those with revenues over $1 billion, are more frequently targeted, businesses of all sizes should be vigilant.
Understanding Payment Fraud
Payment fraud encompasses a range of malicious activities, including the fraudulent use of checks, credit cards, and electronic payments, as well as schemes to solicit unearned payments. Each type of fraud requires tailored strategies for effective risk mitigation.
Building a Strong “Human Firewall”
The rise of payment fraud underscores the need for a comprehensive prevention strategy that combines employee education, stringent controls, and technological safeguards. However, the effectiveness of these measures can be compromised if a strong “human firewall” is lacking.
Fraudsters often exploit the unawareness of employees through phishing emails and deceptive phone calls, bypassing financial controls and technological defenses. To combat this, organizations should implement training programs for employees during onboarding and periodically thereafter, focusing on recognizing and responding to suspicious payment requests. Even cybersecurity professionals can fall victim to sophisticated email phishing attacks, highlighting the importance of ongoing security awareness.
Encouraging a culture of vigilance and reporting suspicious activities is essential, supported by commitment from senior leadership.
Implementing Controls and Safeguards
At TD Bank, our approach to fraud prevention is comprehensive and includes a suite of digital services designed to protect businesses from payment fraud. We recommend the following two key services for our commercial customers:
TD Positive Pay:
This service enhances security by matching checks presented for payment against those issued by a business’s account. Any discrepancies in check serial numbers or amounts trigger alerts, allowing businesses to decide whether to honor or reject the payment. The service also offers images of suspect items for reference and verification, along with payee name verification and teller positive pay options.
ACH Fraud Control:
These services provide proactive protection against unauthorized Automated Clearing House (ACH) transactions. ACH Positive Pay functions similarly to TD Positive Pay for checks, enabling businesses to filter and monitor allowable ACH transactions. The ACH Block Service automatically returns all payment requests if an ACH item is resubmitted without authorization.
Both services operate in real-time, playing a crucial role in safeguarding our commercial customers from check and ACH fraud.
Commitment to Fraud Prevention
Integrating these services into TD Bank’s fraud prevention strategy reflects our dedication to employing cutting-edge technology and data-driven insights to combat the increasing threat of payment fraud. By continuously monitoring fraud trends and adapting to new threats, TD Bank not only protects its customers but also enhances the overall stability and trust in the financial system.
In the dynamic landscape of commercial banking, fraud prevention is a top priority for financial institutions and their customers. TD Bank has taken a leadership role in this effort, recently receiving the 2024 FICO Decisions Award for Achievements in Fraud Management. This recognition highlights our commitment to preserving our customers’ financial integrity through innovative fraud management solutions.
In collaboration with FICO, we developed the TD North American Fraud Detection Platform, which integrates real-time customer and financial payments data to enhance our fraud detection capabilities.
For businesses looking to bolster their defenses against fraud, TD Bank’s services provide advanced protection. With the support of our Treasury Management specialists and a comprehensive suite of tools, companies can confidently navigate the complexities of commercial banking, knowing their assets are well-protected.
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