The latest version of the AFP Payments Fraud survey is summarized in this piece. Data reflects 2016 responder fraud activity and how that compares with prior year. In this report there is bad news/good news, in that while a high level of fraud activity continues, the slope of growth has flattened from the prior two years. Indications are that corporates have and continue to focus on mitigating payments fraud through better controls and employee training. This is particularly important when confronting the escalating tactics associated with business e-mail compromise (BEC), the fraudster approach using data and social engineering to motivate employees into actions resulting in fraud payments.
“The fact that overall payments fraud is currently at its highest level is troubling,” the AFP wrote in its report. “It signals that organizations cannot be complacent about the threats of payments fraud.” One possible reason for the overall increase in fraud is that many attacks are originated via business-email compromise (BEC), which the Federal Bureau of Investigation describes as “a scam carried out by compromising legitimate business email accounts through social engineering or computer intrusion techniques to conduct unauthorized transfers of funds.”
One interesting observation is the need for ongoing vigilance. While fraud activity is high, the level of financial loss is relatively low, but this of course can be a deceptive measurement. As Mercator has pointed out recently in a report entitled The Enemy at the Gates: Payments Fraud Is a Symptom, although the financial loss from the fraud payment occurrence itself might be sometimes low (certainly not always), it is only one aspect of the problem, since the attendant costs of managing the subsequent fallout, including reputational and relationship damage, can be hard to overcome. We will continue to monitor this high-priority space.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
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