Payment Fraud Trends : What Can you do? Protect Yourself and Your Business from Financial Fraud.

Payment Fraud New ways to steal the old way 77% of organizations target of check fraud* Check fraud up even while check used declining Steal, wash, or create checks – publishing software Stolen from mailbox Purchase account numbers – black sites Online For Sale, Investment, Sweepstakes, Work at home “Just wire back the difference” *2015 AFP Payments Fraud and Control Study

Payment Fraud Skimming Hardware capture card data ATM, gas pumps, retail point-of sale Card passes skimmer first Data transmitted wirelessly Info sold via black websites

Payment Fraud - Skimming

Payment Fraud – Skimming with PIN Capture

Payment Fraud Corporate Account Takeover Target businesses of all sizes Malware via or websites - Trojan/Zeus Malware “records” your credentials Execute transfers via your PC Omaha MECA Payroll Fraud

Payment Fraud Social Engineering Phishing, Vishing, Smishing Two thirds of electronic fraud cases can be traced back to phishing. One in ten people open an attachment when they have know idea what they are opening. takeover or social site mimic - LinkedIn, Facebook Message from boss or vendor (Scoular Grain) Card/online access has been frozen – click this link

Payment Fraud PC Extortion Malware via Cryptolocker encryption Ransom within 72 hours Payment in MoneyPak or Bitcoin

Payment Fraud Fighting Check Fraud Positive Pay-match paid checks High Dollar Authorization-checks over set dollar amount Secure Check Stock Replace check payments with ACH, Card or wire payments Separation of Duties Online Account Review

Payment Fraud ACH and Wire Fraud Originator creates fraudulent transaction – bill payment Employee creates a fraudulent wire or credit based on boss’ message Supply Chain - impersonates a vendor Fraudulent sent directly to the bank

Payment Fraud Fighting ACH and Wire Fraud Restricted Access; only those needed to create trans. Dual Control – two users needed to initiate ACH Filter or Block – only unauthorized ACH electronic Segregate Funds – separate account for specific deposits Multifactor authentication -Tokens – one-time password Wire Call Backs Online Account Review/Reconciliation Separation of Duties Dedicated Workstation – no or Social Media allowed Up-to-Date Antivirus Software & Good Back-ups Strong Password Policy

Payment Fraud Card Payments and Mobile wallets Liability shift to merchants – October 2015 Tokenization Google Wallet, Apple Pay, SoftCard

Payment Fraud Fighting Internal Fraud Dual control/custody Timely reconciliation/review Face-to-face or phone call verification (out-of-band) Separation of Duties Credit & Background checks Insurance Education/Training

Payment Fraud – Top Five Take Aways Protect Your Credit Cards and Bank Accounts Secure Your IT Infrastructure Have a Password Policy Educate Your Staff Insure Your Business​

Payment Fraud Questions? Jim Smith Dana Turner