Payments Fraud Hit Record High 78% in 2017 According to New Survey of Finance Pros
Friday, April 13th, 2018
The 2018 AFP Payments Fraud Survey, underwritten by J.P. Morgan, revealed that payments fraud reached a new high in 2017 after a downswing earlier in the decade. A record 78 percent of all organizations were hit by payments fraud last year, according to the survey of nearly 700 treasury and finance professionals.
Checks continue to be the subject of more fraud than any other payment method, with 74 percent of respondents reporting this form of attack. Wire fraud followed at 48 percent, while corporate card fraud ranked third at 30 percent.
Business email compromise (BEC) played a major role in payments fraud in 2017, with 77 percent of organizations experiencing BEC in 2017. Additionally, 54 percent of BEC scams targeted wires, followed by checks at 34 percent. The good news is that 77 percent of organizations have implemented controls to prevent BEC scams.
"It is alarming that the rate of payments fraud has reached a record high despite repeated warnings," said AFP President and CEO Jim Kaitz. "In addition to being extremely vigilant, treasury and finance professionals will need to anticipate scams and be prepared to deter these attacks."
"The fraud survey serves as an important resource in understanding the potential risks within the payments industry," said Bob St Jean, Managing Director and Treasury Services Executive at J.P. Morgan. "With more than three-quarters of companies experiencing fraud in 2017, it is important that businesses take preventive measures by educating their employees and implementing processes to prepare and protect their infrastructures from cyberfraud."
Other highlights of the 2018 AFP Payments Fraud and Control Survey include:
65 percent of payments fraud is committed by individuals outside the organization
67 percent of payments fraud is discovered by treasury staff
92 percent of organizations report that payments fraud attacks collectively cost 0.5 percent of the organization's annual revenue
47 percent of organizations discovered fraud less than two weeks after the incident occurred