Accounting Risk Management

3 Types of Wire Fraud to Look Out For to Keep Your AP Fraud-Free

March is Fraud Prevention Month. Around the globe in countries including the United States, Australia, and Japan, people are coming together to educate and prevent both personal and business fraud. Below are three types of fraud to keep an eye out for in 2016.

1) Executive Expense

Although it exists in many forms, one type of wire fraud that has been targeting businesses in recent months is the Business Executive Scam (BES). Accounting departments will receive an email that looks like it has been sent by their company’s HR or IT department notifying them that an “executive” is working off-site and needs to take care of an outstanding payment right away.  Typically a large payment is requested to be made to a specific bank account and can result in significant losses for a company.

2) Client Over-payment

For companies that sell products online, this specific type of wire fraud has seen a recent increase in occurrences. Someone posing as a new client will express their interest in buying your service or product. However, when they send payment via check the amount is larger than expected and it appears they have overpaid. The “buyer” insists it’s an error and requests that the balance is returned using a using a money transfer service. The original payment is fake and money

3) Office Supply Over-payment

Thousands of companies have been subject to this scam. A salesperson will call insisting that they are your current supplier and they are offering promotional pricing that will be increasing soon. However, when your invoice arrives it is clear that the supplier is not the same and the price charged was 50% to 300% higher than your normal pricing.

How to Prevent Wire Fraud

Below are some ways that you can easily avoid wire fraud to protect your company from financial losses as well as the resources required to rectify fraudulent transactions.

  • – Beware of emails that are urgent in nature coming from sources you have not dealt with in the past
  • – Before sending payment, get in touch with suppliers by phone to confirm that the request is legitimate
  • – Monitor spelling and formatting errors and attachments coming from unfamiliar email addresses

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