Today we’re sharing insight from guest blogger, Tabitha Williamson, Vice President and Treasury Management Sales Officer at Lake City Bank. We hope you enjoy Tabitha’s wisdom and perspective.
Protecting your financial assets isn’t a one-person job—it takes a village, as they say. Financial institutions are seeing fraud claims from businesses rise at an alarming rate. In fact, 62% of businesses reported some type of fraud attempt, according to the Association of Financial Professionals’ 2015 Payments Fraud and Control Survey. Highlights of this annual look at payment fraud show that checks remain the most often-targeted payment method, although wire fraud incidents, which doubled year over year, are rising.
To illustrate the impact fraud has on our company, during my 15 years at Lake City Bank, I have seen our Client Protection Services department not only be created, but grow to employ six full-time individuals who dedicate their workday to discovering, investigating, and trying to mitigate fraud attempts and losses to the bank and our clients.
The best advice I can give business owners for preventing fraud losses is to make sure you have a candid conversation with your financial institution about fraud so you understand your potential liability along with the best way you can work with your financial institution to alleviate risk.
What Does Fraud Look Like?
Businesses and financial institutions see fraud attempts and losses through wire, check, credit card, and ACH channels. These attempts can start out small and grow exponentially in amount and number of attempts as fraudsters test their victim’s awareness. Alternatively, fraudsters may try one large attack in an effort to gain maximum funds in the shortest amount of time.
Financial institutions and businesses also see numerous attempts and losses from fictitious checks, which appear in the form of altered payees, altered dollar amounts, or entirely fraudulent checks. We are seeing attempts to initiate fraudulent wires more frequently. I believe wires are becoming a more popular target because funds can be much harder to retrieve once they have been sent. Unauthorized electronic transactions are increasing in frequency as well. Within each payment type, we see numerous schemes to obtain or direct funds to unscrupulous individuals.
What Can I Do?
We can recommend many best practices to mitigate fraud, but the most important one is to have a conversation with your financial institution. Your banking partner should be able to provide you with fraud prevention tools and recommended safety measures. Look for solutions like these:
- Limit wire initiation to preferred methods, such as in person with proper identification, online with token security, or perhaps, via phone with PIN security.
- Use dual approval and/or user specific limits for transactions initiated online such as wires and ACH, never emailing sensitive information (such as account numbers, Social Security numbers, etc.), and verifying requests to change vendor banking information.
- Insist on verifying any internal requests to initiate a wire received from a fellow employee via email.
Other best practices may seem dated but still prove effective in our highly technical world.
- Make sure you reconcile your account in a timely fashion. With online banking, timely ideally means more than once per month—but at least once per month. Early notification of a suspicious transaction is the best way to help recover funds.
- Use check stock with enhanced security features and keep check stock and deposit tickets under lock and key.
- Establish segregation of duties within your accounting department. No single employee should have access to bank balances and activity as well as have authority to write checks and make deposits without another set of eyes overlooking the process.
- Work with your financial institution to add check positive pay and ACH positive pay to your accounts. These products help ensure that unauthorized checks and ACH transactions are not posted to your account. Fraud prevention tools will show your financial institution what transactions to expect on the account before they get to the bank to clear.
How Should My Bank Help?
Financial institutions do not intentionally make transacting business complicated. Many of the security measures we employ may be seen as cumbersome, but they are another way to keep your dollars where they belong - in your account. Your bank should be employing security measures on your behalf, including:
- Asking verification questions to all callers before releasing any information on your account.
- Employing the latest verification technology for any user accessing online banking such as out of band authentication (security questions) and tokens when necessary.
- Limiting the functions available online to those you only need and use.
- Enacting strict policies and procedures for any transaction requests originated outside of a branch or online.
Most importantly, your bank should be constantly learning about what threats are out there and be working to stay one step ahead of them. Your bank should communicate with you, keeping you updated on the latest threats and what you can do together to secure your accounts.
My intention hasn’t been to present a comprehensive list of threats or best practices, but I do hope to get you thinking about what you are doing—and not doing—to protect your financial assets. Contact your financial partner and request a review of your financial security so you can do as much as possible to ensure that your dollars stay where they belong.
Remember—an ounce of prevention really is worth a pound of cure. Once the funds have left your account, it’s often too late. One large fraud loss can have a major impact to your bottom line.
This content was written and shared by guest blogger, Tabitha Williamson.
Tabitha Williamson, CTP, is Vice President and Treasury Management Sales Officer with Lake City Bank. Tabitha’s career at Lake City Bank has included a variety of positions and areas of responsibility in her 15 years with the company. In 2007, she pursued and obtained her Certified Treasury Professional accreditation. Williamson enjoys interacting with her clients regularly and helping them find efficiencies in cash and treasury management. She earned her bachelor of science in management from Grace College in Winona Lake, Indiana.
Williamson is active in her community, serving as vice president of the Baker Youth Club board, teaching Junior Achievement classes, and assisting with mobile meals scheduling and delivery. She is also active at her children’s schools.
Connect with Tabitha on LinkedIn. Connect with Lake City Bank by visiting their website, LinkedIn, and Facebook.
