Hello. This is CoBank’s Fraud Wise helping you avoid becoming a victim of fraud. I’m Bora Manzanares, manager of the financial crimes compliance team at CoBank. Today I’ll be discussing the latest in best practices for prevention of payments fraud.
Fraud continues to be a much-discussed topic, and for really good reason. Fraud has been steadily on the rise, and it was so prevalent in 2020 that it’s even more important than ever to place a spotlight on how to actually prevent it. According to the Federal Trade Commission, the Consumer Sentinel Network database received more than 4.7 million reports last year from an array of entities, such as consumers, to federal and state entities, and local law enforcement agencies.
At CoBank, we have a lot of tips and tricks that can be critical in preventing fraud, starting with how you receive and respond to payment requests, and current payment changes with new vendors and vendors that you already have a relationship with.
The key here is to always to validate the changes with a pre-determined, known account number. In addition, it is imperative to never respond to an email for these types of requests, and not to use a phone number delivered through an email. Do not call the number delivered in the email, because you could be talking to the fraudster. Instead, to be safe, call a known number and talk to a person live to ensure any request you receive is legitimate.
It’s also essential to perform due diligence on unkown potential vendors of any kind to ensure the business you are working with is a legitimate business with a legitimate purpose. There are a few ways to do this, such as researching the business’ online presence, comparing information you find from various online sources about the organization, such as the BBB or your local chamber of commerce. And looking for customer and media reviews online.
You can also ask the company if they have a fraud department, and request to speak with them. If your business has an individual or team dedicated to fraud detection, it is always advised to have them identify any potential red flags. It is also a great idea to provide fraud awareness training for your executives, managers and employees. This is to make sure they recognize red flags and know that reporting potential fraud immediately is critical. In addition, if your business issues checks, consider using one of various positive pay services offered by your bank to safeguard your account against counterfeit check fraud.
This has been CoBank’s Fraud Wise. Helping YOU avoid becoming a victim of fraud. For more information on these and other types of fraud, visit cobank.com/security.