Five Tips to Help Prevent Fraud This Holiday Season
For many of us, the holidays are a great time to get together with family, enjoy delicious food, and reflect on the joys and challenges of the previous year. Unfortunately, fraudsters don’t take any days off. As the year winds down, it’s important to remain diligent and follow these five tips to help prevent fraud this holiday season:
- Do your due diligence on any new clients. Research the company and owners and make sure to request any additional identifying/verifying information. Know Your Customer is a legal requirement to help prevent fraud, money laundering, and terrorism financing. Taking the time to vet your new clients goes a long way in helping to identify if the company is a good candidate for your liability risk when processing ACH.
- Do not accept any account changes, payroll changes, or requests via email. Always verify the information by calling the contact number you have on file. Business email compromise is one of the most prevalent cybercrimes. While you may think you are communicating with your customer, a fraudster may have accessed their network or created an email account with slight variations to fool victims into thinking the fake account is authentic.
- Be wary of new technology-assisted fraud. Criminals use new and rapidly evolving technologies like generative artificial intelligence (GenAI) to lower the cost, time, and resources needed to exploit financial institutions’ identity verification processes. FinCEN’s analysis of BSA data indicates that criminals have used GenAI to create falsified documents, photographs, and videos to get around financial institutions’ customer verification controls. With GenAI, it can take as little as seconds for a criminal to alter or generate images used for identification documents, such as driver’s licenses or passport cards.
- Strengthen employee access controls. Limit payroll and financial system access to only those employees who need it for their role. Implement multi-factor authentication (MFA) for added security, especially during the holidays when employees may be working remotely.
- Educate employees on holiday scams. Provide training on common holiday fraud tactics, such as phishing emails disguised as holiday promotions or fake requests from “executives”. Reinforce the importance of verifying unusual requests, particularly those involving payment or sensitive data.
From all of us at Kotapay, we wish you a happy and safe holiday season!
