Survey: Increase in Payments Fraud Activity Attributed to the Pandemic, According to 65% of Financial Professionals
The 2021 AFP Payments Fraud and Control Survey, underwritten by J.P. Morgan, found that business email compromise (BEC) continues to be the most common source of fraud attempts at 62% of companies.
April 6, 2021 – Bethesda, Md. – Of those respondents that reported increased fraud activity at their organizations, nearly two-thirds of treasury and finance professionals believe that the COVID-19 pandemic is to blame for some of the uptick in payments fraud at their companies, according to the 2021 Association for Financial Professionals (AFP) Payments Fraud and Control Survey.
Furthermore, BEC continues to be the primary source for attempted or actual payments fraud, as 62% of companies that experienced attempted or actual payments fraud in 2020 did so as a result of BEC. Although the percentage of companies financially impacted by BEC has been declining, 76% of respondents report that their organizations had been targeted by BEC attempts in 2020.
Accounts Payable departments are the most susceptible to BEC fraud. Sixty-one percent of respondents report that their Accounts Payable department is most often vulnerable to BEC.
“While the COVID-19 pandemic has certainly impacted how organizations operate, employees must continue to be watchful of fraudulent activity and they must have access to the training and education needed to detect the same,” said Jim Kaitz, President and CEO of AFP. “Our working environment may have changed, but it is even more crucial to be vigilant now and remember that fraud is still prevalent – whether we are working from the office or not.”
“We’ve seen companies of all sizes across industries shift how they work, manage payments and move money over the last year. With changes in behavior comes more responsibility for everyone involved,” said Sue Dean, Head of Product Delivery for J.P. Morgan’s Commercial Banking and Wholesale Payments businesses. “Raising awareness and educating both leaders and employees is critical, as is offering intentional and intuitive digital solutions so companies are equipped to combat and properly protect themselves against fraud.”
Other highlights of the 2021 AFP Payments Fraud and Control Survey include:
- In 2020, 74% of organizations were targets of payment scams. While that is smaller than the shares reported in 2018 and 2019, it still indicates that a large percentage of companies continue to be impacted by payments fraud.
- According to 77% of treasury and finance practitioners, educating employees on the threat of BEC and training them to identify spear phishing attempts is an important component in controlling BEC.
- In 2020, checks and wire transfers continued to be the payment methods most impacted by fraud activity (66% and 39%, respectively). However, the incidence of check fraud activity is on a decline and the check fraud activity observed in 2019 is an 8-percentage-point decrease from last year.
More than 500 treasury and finance professionals responded to the survey. For more information about the survey, visit www.afponline.org/paymentsfraud. For press queries, contact Melissa Rawak at [email protected].
Headquartered outside of Washington, D.C. and located regionally in Singapore, the Association for Financial Professionals (AFP) is the professional society committed to advancing the success of treasury and finance members and their organizations. AFP established and administers the Certified Treasury Professional and Certified Corporate FP&A Professional credentials, which set standards of excellence in treasury and finance.
Copyright © 2023 Association for Financial Professionals, Inc.
All rights reserved.