Payments Fraud Hits Record High of 78 Percent
Friday, April 20, 2018
Payments fraud reached a new high in 2017 after a downswing earlier in the decade, according to the 2018 Association for Financial Professionals Payments Fraud Survey, underwritten by J.P. Morgan. A record 78 percent of all organizations were hit by payments fraud last year, according to the survey of nearly 700 treasury and finance professionals.
Checks continue to be the subject of more fraud than any other payment method, with 74 percent of respondents reporting this form of attack. Wire fraud followed at 48 percent, while corporate card fraud ranked third at 30 percent.
Business email compromise (BEC) played a major role in payments fraud in 2017, with 77 percent of organizations experiencing BEC in 2017. Additionally, 54 percent of BEC scams targeted wires, followed by checks at 34 percent. The good news is that 77 percent of organizations have implemented controls to prevent BEC scams.
“It is alarming that the rate of payments fraud has reached a record high despite repeated warnings,” said AFP President and CEO Jim Kaitz. “In addition to being extremely vigilant, treasury and finance professionals will need to anticipate scams and be prepared to deter these attacks.”
Other highlights of the 2018 AFP Payments Fraud and Control Survey include:
- 65 percent of payments fraud is committed by individuals outside the organization.
- 67 percent of payments fraud is discovered by treasury staff.
- 92 percent of organizations report that payments fraud attacks collectively cost 0.5 percent of the organization’s annual revenue.
- 47 percent of organizations discovered fraud less than two weeks after the incident occurred.