FINANCE
Protecting your business from fraud By Andrew Kostiw, Director Treasury Management, TD Bank
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aving worked in the financial services industry for over 20 years, I can confirm that the topic of fraud and fraud prevention has never been a more hotly discussed issue with my clients. There is not a week that goes by without a client telling me about fraudulent activity, or an attempted fraud, to their business. Every year, thousands of Canadians fall victim to credit card and debit card fraud, telemarketing scams, identity theft, online fraud and insurance fraud.
A common story
I often hear of stories where emails were received, always of an urgent nature and claiming to be from the CEO or senior management, requesting a money transfer be sent immediately to an unknown destination. Often done at a time when companies are busier than usual and operating with fewer employees (around holidays, for example), catching staff off guard. Fraudsters have become so sophisticated and targeted that they often use tools, like various social media channels, to determine when key executives from a company are away. There is no doubt that employees strive to do the right thing, and sometimes that thing is as simple as taking a pause and asking yourself the following questions: Does this email match what my CEO or manager would normally ask me to do? Does it seem suspicious? Should I call to verify? Some examples of the types of frauds we are seeing more frequently include: wire fraud, invoice fraud, cheque fraud and business email compromise (BEC). Unfortunately, these examples only represent some of the types of fraud that are out there. Remaining vigilant and aware of the threat is an important piece of the prevention process. I have learned a lot from
Every year, thousands of Canadians fall victim to credit card and debit card fraud, telemarketing scams, identity theft, online fraud and insurance fraud. delivering fraud-prevention seminars to my clients. I have learned about different types of fraud attempts and I am increasingly shocked at how creative and sophisticated they have become. It is becoming increasingly difficult to detect potential fraud and protect your business. That is why it is critical that businesses constantly think about fraud prevention techniques and discuss this topic with their employees on a regular basis.
So what can we do?
The following is a list of fraud prevention techniques that I have shared with my clients over the years. By no means is this an exhaustive list but it does touch on some of the key areas that businesses should consider when combatting this threat. Reconcile, reconcile and reconcile — Reconcile all your business banking transactions daily. This data can be quickly and easily accessed using your online Cash Management portal and will give you same day insights into your accounts and transactions. Remember when fighting fraud, early detection is an important component in any recovery effort. Manage or reduce those cheques — The good news is that cheques are declining in usage, the bad news is that they continue to be a primary payment method for many businesses and the primary target for fraud attempts. Cheque fraud has been around for many years, so if your company needs to issue cheques, it’s important to take steps to help prevent it from impacting your business. Some prevention techniques to consider include: centralize cheque issuing, use the latest security features on cheques like chemical protection, padlock icons
and always use Magnetic Ink Character Recognition Serial Numbers (MICR) on business cheques. If cheques must be issued, consider adding a fraud protection service such as Positive Pay or Payee Match to help mitigate cheque fraud exposure. Validate payment instructions — Exercise caution when receiving emails containing instructions appearing to be from, or on behalf of, an executive who requests urgent processing of a wire transfer. Verify such requests through another channel (such as a call back) to confirm authenticity. Payment authorizations — If your company makes online payments (EFT, wires), consider the number of approval levels in place before that payment leaves your bank account. Does it match the signing authority on your bank accounts, is there a separation of duties between payment creator to payor and is there a payment verification process in place for online payments? Many clients for example, are now moving to dual approvers on all electronic payments. Check your surroundings — Inspect Point of Sale equipment regularly including serial numbers, wires and cables. If any equipment looks unfamiliar, appears altered, or is missing, notify your merchant solutions provider immediately. Check ceilings, walls or shelves near PIN pads for holes that could conceal a small camera. Install debit terminals so that customers have enough room to comfortably shield the PIN pad when entering their PIN number. The most common way of stealing a cardholder’s PIN is by “shoulder surfing” — looking over the cardholder’s shoulder. Make sure that any security May 2018 — BC Shipping News — 49