US payment fraud attempts jump 71%

The number of payment fraud attempts on US companies jumped 71% last year, driven by cybercrime, finds new research by payment fraud prevention platform Trustpair.

Its survey of more than 260 finance and treasury leaders found that 83% of US firms saw an increase in cyber fraud attempts on their organisation in 2023.

Some 95% of US firms were targeted by at least one fraud attempt during the year, and 90% of these companies were hit with at least one successful attack.

Trustpair said a rise in cyber fraud, which includes activity such as hacking, deepfakes, voice cloning and highly sophisticated phishing schemes, is behind the rising risk.

Fraudsters primarily used text messages (50%), fake websites (48%), CEO and CFO impersonations (44%), social media (37%), hacking (31%), business email compromise (BEC) scams (31%) and deepfakes (11%) to dupe organisations.

Just over a third (36%) of companies said the average financial loss from a successful fraud attack was more than $1m. A quarter said the loss was more than $5m.

The survey finds that business relationships are at risk from fraud. Three-quarters of c-suite level finance and treasury leaders say they would stop doing business with an organisation that fell victim to payment fraud and lost their payment.

Finance and treasury leaders said they lose sleep over the potential for reputational damage with customers (51%), investors (50%) and suppliers and vendors (45%).

Looking forward, 67% of companies expect payment fraud to rise further this year. But only 16% of companies regularly clean and monitor their vendor database, and 28% verify information on the companies they work with.

Trustpair found that 34% percent of companies use automated account validation tools to validate vendors, compared to 17% a year ago.

“Our research shows fraudsters are becoming increasingly more sophisticated in their tactics and their reach is expanding. They’re using new channels to infiltrate organisations,” said Baptiste Collot, co-founder and CEO of Trustpair.

“As the risk of vendor payment fraud grows, so does the need to automate bank account validations and embed them into your daily processes. It’s essential for winning the fight against fraud and ensuring payments are sent to the correct parties.”