How to Protect Your Business from Check Fraud

Updated on January 17th, 2022

As long as money has existed within human society, there has been concern over the security surrounding transactions that involve it.

The development of banks and credit cards meant that we no longer had to carry or store paper money, helping to increase the security we have felt about what we have worked so hard to get. However, even though electronic payments make it more convenient and we don’t have to worry about physical theft, the concern has shifted to worry over digital theft via fraud and data breaches.

Now, there are simply new types of fraud, which will keep showing up, just as fraud of any kind – always has – and we will deal with it. We will keep coming up with ways to keep our finances safe. Security is being increased in almost every sector of our society — covering check fraud, credit card fraud, ACH fraud, wire fraud, and digital platform fraud, all of which can threaten businesses of all sizes (and personal assets, as well).

We’ve put together a SlideShare presentation with tips on how to protect your business from these many types of fraud by describing the various types of fraudulent activity to look out for.

Check fraud is the easiest to commit and often delivers the highest value payout for criminals. The fraudsters use what is known as paper hanging to write checks on closed accounts. They also use check kiting that involves B2B online payments that put both the bank and the business at risk.

Credit card fraud has definitely become harder to commit thanks to magnetic strips, chips, and PIN technology. If a business decides to accept an old credit card that doesn’t use this technology, not only are they putting themselves at greater risk for fraud, but they will also be responsible for the losses from the fraud.

ACH fraud involves stealing customer data. Criminals often resort to hi-tech malware or they persuade the recipient to provide their log-in details. This fraud has led to banks investing in more security technology to stop it from happening.

Wire fraud typically has a criminal calling a victim and claiming to be from their bank or credit card company in order to get them to provide account info ration so they can perpetuate the fraud. Luckily, people are becoming quite discerning on this one. The perps may even hack into a corporate system to get to a professional email so they can steal money through wire transfers.

Lastly, digital fraud is the most rare type of fraud, but is also becoming enticing to the criminals. The most difficult to detect is the digital break-ins because of the varied systems in use. Much time, effort, and money is being spent to protect all of us and our future digitalized money system. Typically, criminals use phishing and emails to get the information they need to steal money online.

Be aware and alert to these types of fraud that can impact your business. To learn more about each one, be sure to read our SlideShare presentation on how to protect your business.


Renzo Costarella

Renzo Costarella

Renzo Costarella gives financial tips and tricks to help retire early. He is an expert at fintech sales and was former sales person at Due. He currently is an account executive at Brex. Previously, he has worked in sales, product, and growth. He graduated from UC Santa Barbara with a Degree in Business/Managerial Economics.

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