B2B Payments

How B2B Payments Fraud Hides Within The Enterprise

When it comes to B2B payments fraud, it's not a matter of if it happens, but when.

Speaking with Karen Webster in a recent interview, OnPay Solutions President and CEO Neal Anderson explained that organizations have to prepare themselves to mitigate the fraud threat, even as employees work from home.

"Everybody needs to be suspicious," he said. "Everybody should worry that this activity is happening. If it hasn't happened to you, it will. It's only a matter of time."

Paper checks are a particularly weak spot for organizations as check fraud balloons. With accounts payable professionals working remotely, Anderson said he's heard from some firms whose AP staff have had to physically take check-printing machines to their homes — opening up the door for fraudulent activity.

While eliminating paper is a much-needed first step to combatting B2B payments fraud, electronic payments aren't immune to the risk, either. Again, in a remote working environment, the threat balloons when authentication measures break down. Without the CFO right down the hall, said Anderson, it's far more likely that an AP professional won't take the time to authenticate a seemingly legitimate request to change supplier bank account details, for example.

In this week's B2B Payments fraud roundup, PYMNTS examines the latest news as scams target the enterprise from both within and outside of company walls.

Fraud Captures Faster Payments Council Attention

The U.S. Faster Payments Council (FPC) recently announced the publication of a white paper, "Examining Faster Payments Fraud Prevention," highlighting the growing focus of faster and real-time payments innovators on the topic of fraud. With real-time payments and settlement drastically diminishing the window of time in which financial service providers can detect and stop fraudulent activity, the development of such services must integrate security measures that can stop malicious activity before it starts.

"Identifying and promoting mitigation tactics today will service us well as faster payment systems continue to ramp up," FPC Executive Director Reed Luhtanen said in a statement sent to PYMNTS. "The FPC will continue to develop tools and resources to support the industry in fighting fraud and other challenges to faster payments adoption."

$4.13 Million Stolen In Reported Cyber Fraud Crime Ring

In Ireland, police have connected more than $4.13 million in stolen company funds to a suspected organized crime ring that involved cybercriminals using invoice payment redirect scams. According to the Irish Examiner, Irish businesses are now urged to use caution when making payments to suppliers after several instances of the vendor email compromise scam emerged. Criminals reportedly mimicked email addresses from personnel at legitimate suppliers and requested payments on invoices be made into a new account. Authorities say the criminals had established a network of bank accounts throughout Europe, a scam that reflects the rising threat of B2B payments fraud, particularly amid the pandemic.

In a statement to the publication, Garda Kerry Division Sergeant Jim Foley urged businesses large and small to deploy authentication measures to combat this threat.

"If you receive an email requesting payment to a different account, it may look genuine. However, you should always pick up the phone to your supplier or vendor to verbally confirm the request details," he said. "Also remember to ring a number you know to be from the company, do not ring the number stated in the email request."

$18.5 Million Fraud Scam Leads To Charges Against CEO

While the risk of fraud from outside of the enterprise continues to grow, organizations are also warned that their own employees may be the biggest threat to company funds.

The Securities and Exchange Commission recently issued an announcement of charges filed against the CEO of Trustify, an online marketplace to connect users to private investigators, in an alleged fraud scam. According to the SEC, the CEO is accused of misappropriating funds to pay for personal purchases, as well as diverting funds to his purported consulting firm. The company was reportedly unable to pay its suppliers as a result, the SEC said.

"The scheme resulted in millions of dollars in investors' losses, and the SEC will do all it can to hold the defendants acountible," SEC Philadelphia Regional Office Director Kelly L. Gibson said in a statement.



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border. Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.