How to Mitigate the Possibilities of Account Fraud

Mon, 09 Jul 2012

Technology has provided wonderful tools to make banking faster and easier. We can wire money in seconds and get cash from any ATM in the world. We can pay bills and deposit checks at lightening speed. We can even deposit checks from our office instead of making the trip to the branch. Unfortunately, cyber criminals are evolving just as quickly. There are numerous ways your accounts can be compromised. The good news is that there are ways to counter this fraud.  


Here are Some Things to Avoid:

  • Don’t leave bills with your signed checks in your mail box to be picked up. Criminals can take your bill out of the box, open the envelope, steal your payee information off the payee line, put their name on the check and then cash it. You then loose out on the amount the check was written for, and your bill goes unpaid.

  • When online banking, use a stand-alone computer or laptop, not one that is tied to a network. Cyber criminals can access a networked computer and search for an opening in the system. There have been cases where a network computer was compromised and as a result every computer on that network was exposed to fraud.

  • Don’t give anyone your password. Once your password is compromised, much of your account information can be hacked. Use a dual control system for passwords so that no one person can transfer or wire money online without you, the account owner, authorizing it.


Safeguard Your Business Accounts:pay the man

In a recent fraud seminar we conducted, I asked, “How many of you have some form insurance?” Everyone raised their hands. Why not put the same kind of safety net in place for you business accounts? Yes, it will cost some money, but it can save you from large potential losses. Unlike consumers, business accounts don’t have the same kind of legal protections. The average account fraud is $19,000 dollars! Even worse, the sector that has been targeted the most over the past two years is small businesses.  


Most banks offer cash management systems that can aid in preventing fraud, including various levels of security so no one person can move funds without your final authorization. Positive pay, which is your file of issued checks, is sent to your bank and compared—by serial number and amount—against checks presented for payment against your account. ACH Positive Pay provides your account with a layer of protection from fraudulent ACH debit entries by allowing you to block or filter unauthorized electronic transactions.  


Consider These Measures to  Minimize Fraud:

  • Establish “dual control” authorizations
  • Review your limits for ACH and Wire Transfers to determine if they suit your business needs
  • Consider a “stand alone” computer that is used exclusively for online banking
  • Review your internal controls
  • Seek “expert” advice from CPA’s, insurance company, information technology or legal representatives

Cyber criminals will never stop figuring out ways to defraud people. Part of our job at Webster is to help you prevent fraud from happening, whether it’s informative prevention tips or through our services. What questions do you have about how to protect your business?

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