Combating payments fraud, treasury and finance professionals tighten controls.(HEADLINE)(Survey)

Payments fraud continues to challenge treasury and finance professionals, with almost one-third of respondents to a AFP survey reporting that incidents of fraud increased in 2007 compared to 2006. With 71% of organizations having experienced attempted or actual payments fraud in 2007, according to the 2008 AFP Payments Fraud and Control Survey, companies need to remain vigilant and increase the use of sophisticated tools to confront criminals intent on committing fraud.

Large organizations were more likely to have been the targets of payments fraud than were smaller organizations. Eighty percent of organizations with annual revenues over $1 billion were victims of payments fraud in 2007 compared with 58% of organizations with annual revenues under $1 billion.

Checks were the most vulnerable payment instrument. Almost all organizations (94%) that experienced attempted or actual fraud were victims of check fraud in 2007. Organizations were much less likely to be subject to fraud from electronic payments than from checks, including: ACH debit (26%); corporate cards (13%); ACH credit (4%); and wire transfer (3%). Still, even among organizations that were subject to financial losses from payments fraud, the financial damages were relatively small--the median financial loss was $13,900.

"The battle against payments fraud requires innovative technical tools and high alert to guard against the new technical capabilities and practices of criminals," said Arlene Chapman, CTP, AFP's senior consultant, technical services. "Fortunately, as this survey shows, many organizations are successfully fighting back."

Effective defense against payments fraud calls for a two-pronged approach: (1) implementation of tight internal controls, and (2) use of ...