Dive Brief:
- Payment-fraud activity targeted at businesses is on track to surge this year, according to a recent survey by risk management firm Creditsafe.
- Fifty-three percent of respondents said their organization has been hit by up to six fraud cases to date this year, already surpassing the level for all of last year (52%).
- “At first glance, the 2024 figures may look like last year’s figures. But the survey was fielded in August 2024 and the responses for 2024 fraud cases don’t include the last four months of the year,” said a report on the findings.
Dive Insight:
Just over half of companies are losing more than 30% of their total revenue to fraudulent activities each year, according to the research.
“Fraud can have a devastating effect on your company’s bottom line,” Creditsafe said. “Not only could you lose loyal customers and the sales they bring with them, but you could also be hit with lawsuits and compliance violations, both of which can result in hefty legal fees and regulatory fines.”
Creditsafe’s findings come after a January study from automated fraud prevention services provider Trustpair, showing that payment fraud is on the rise as criminals step up their tactics.
Trustpair found that 96% of U.S. companies were targeted by at least one payment fraud attempt in the past 12 months, a 71% increase from the prior year.
To dupe organizations, fraudsters primarily used text messages (50%), fake websites (48%), social media (37%), CEO and CFO impersonations (44%), hacking (31%), business email compromise (BEC) scams (31%) and deepfakes (11%), according to the Trustpair research.
Earlier this year, British engineering group Arup was in the spotlight after reports that scammers successfully siphoned $25 million from the company by using deepfake technology to pose as the organization’s CFO. Following a video conference with the false CFO and other AI-generated employees, an Arup staff member made a number of transactions to five different Hong Kong bank accounts before discovering the fraud.
In another other fraud case, Evaldas Rimasauskas, a Lithuanian man, pleaded guilty in 2019 to stealing more than $100 million from Google parent Alphabet and Facebook owner Meta Platforms in a scheme that involved a fake company, as well as bogus emails and invoices, CNBC reported at the time.
Nearly 30% of finance teams are trained monthly on vendor fraud and 21% are trained quarterly, according to Creditsafe’s report. Another 47% of finance teams are trained on invoice fraud at the start of employment, with 38% trained quarterly.
“But that still leaves a considerable portion who aren’t being trained in spotting and preventing vendor fraud and invoice fraud often enough or at all,” the report said.
Creditsafe surveyed 200 U.S. finance and accounting professionals level last month. The respondents represented companies with over 250 employees across various industries, including retail, transportation and manufacturing.
