Companies plagued by cheque fraud

Payments fraud is on the increase, including old fashioned forms of fraud such as cheque fraud according to the findings of the 2009 Association of Finance Professionals' (AFP) Payments and Fraud Control Survey.

More than 70% of companies surveyed experienced actual or attempted payments fraud in 2008, with 40% experiencing increased fraud activity during the second half of 2008 as economic conditions worsened in the U.S. Overall 30% of respondents said incidents of fraud increased in 2008 compared to 2007.

The pickings appeared to be richer for fraudsters from larger companies, with 80% of companies with annual revenues in excess of $1 billion falling victim to payments fraud in 2008, compared with just 63% of companies with annual revenues under $1 billion.

Also old fashioned payment methods such as cheque appeared to be more susceptible to fraud with nine out of 10 companies that experienced attempted or actual payments fraud in 2008 being victims of cheque fraud. Other common forms of fraud were ACH debit (28%); consumer credit/debit cards (18%); corporate/commercial cards (14%t); ACH credits (7%); and wire transfers (6%).

US companies are being encouraged to write less cheques with solutions such as ACH and commercial cards being offered as an alternative, but it seems there is still some way to go before all payments migrate to electronic channels, which are still susceptible to fraud, but perhaps not to the same extent as fraudulent cheques.