Organisations reported being victimised by attempted or actual payment fraud activities in 2023, according to a study by the Association for Financial Professionals (AFP), underwritten by Truist.
Eighty percent of 2024 AFP Payments Fraud and Control Survey respondents admitted experiencing payment fraud woes in 2023, which reflects a 15-percentage point increase in payments fraud over 2022 and the highest rate reported since 2018.
According to the report, checks continue to be the payment method most vulnerable to fraud, with 65% of respondents saying their organisations faced fraud attacks of this type.
Despite the high rate at which checks are a frequent target of payments fraud, 70% of organisations currently using checks do not plan to discontinue their use of checks within the next two years.
Other key findings from the 2024 AFP Payments Fraud and Control Survey, which polled 522 corporate practitioners, include:
- In 2023, the most common source of payments fraud was an external source or individual (e.g., forged check, stolen card, corporate synthetic identity fraud). Sixty-five percent of financial professionals report that payments fraud at their companies was the result of actions by an individual outside the organisation.
- Thirty percent of respondents were unsuccessful in recovering funds lost to fraud. Meanwhile, 29% managed to regain up to three-fourths of lost funds, and 41% successfully recouped over three-fourths of lost funds, the bulk of which were lost due to check fraud.
Committed to combat
"Financial professionals are steadfastly committed to combatting payments fraud," says Jim Kaitz, President and CEO of AFP.
"However, fraudsters are leveraging increasingly sophisticated tools, and to overcome this challenge, organisations must prioritise awareness, training, and the review and implementation of stringent policies and procedures to mitigate the risk and impact of payments fraud effectively."
