B2B payments warning: accounts payable fraud on the rise

In the 2018 AFP survey of nearly 700 treasury and finance professionals, it was found that 78% have been hit by fraud in 2017. The candidates most susceptible to fraud were checks. Moreover, the rate of payment fraud has reached a record high and treasury and finance professionals are advised to be extremely vigilant and will need to anticipate scams and be prepared to deter these attacks.

Accounts payable fraud is a part of the overall occupational fraud going on worldwide. The Association of Certified Fraud Examiners (ACFE) reports from their 2016 findings that the median loss per business due to fraud was USD 150,000.00 with the vast majority coming from financial statement loss, according to online publication Virtual Strategy.

An example of such type of fraud involves the deliberate falsification of bank account details, resulting in a legitimate payment being deposited into an account controlled by ‘illegitimate parties’. It appears the fraud was allowed to happen by human error and staff failing to verify a contractors’ bank account details. After 12 months of searching police have been unable to identify the parties involved.