End of Year Fraud Alert
Be sure to confirm with employees and vendors when they request to have payment or direct deposit changes made via email.
We may sound like a broken record, but this type of fraud continues to happen with a high frequency. Fraudsters submit an email that LOOKS like it is coming from one of your employees or vendors, but in fact routes payments to their own accounts. Please confirm (with a phone call or in person) any changes submitted by email.
The following information is provided by NACHA. Nacha governs the thriving ACH Network, the payment system that drives safe, smart, and fast Direct Deposits and Direct Payments with the capability to reach all U.S. bank and credit union accounts.
False Pretenses
New Nacha-Defined Definition-False Pretenses: False pretenses are defined as “the inducement of a payment by a Person misrepresenting (a) that Person’s identity, (b) that Person’s association with or authority to act on behalf of another Person, or (c) the ownership of an account to be credited.” This definition covers common fraud scenarios such as Business Email Compromise (BEC), vendor impersonation, payroll impersonation, and other payee impersonations, and complements language on “unauthorized credits” (account takeover scenario). It does not cover scams involving fake, non-existent, or poor-quality goods or services.
Credit Entries Not Authorized by the Originator
Account takeover - Fraudster gains access to the credentials necessary to initiate a transaction and initiates a credit entry from the accessed account. The account holder (Originator) did not authorize the credit entry.
Credit Entries Authorized by the Originator under False Pretenses
The receiver of the credit Entry misrepresents the Receiver’s identity or ownership of the receiving account.
Fraudster impersonates someone with the authority to order payment (e.g., a CEO/CFO via business email compromise) to induce someone with authority to originate a payment from the credit account to make a payment.
The fraudster claims to be a vendor with whom the accountholder has a relationship and requests payment to the fraudster’s account.
The fraudster claims to be a real estate settlement agent or attorney and requests funds transferred to the fraudster’s account.
The fraudster claims to be an employee of an organization and requests payment to the fraudster’s account; or the fraudster gains access to the organization’s payroll system and redirects payroll payments to the fraudster’s account.