Financial crime: Payment fraud over the Internet – what should you do?

Financial crime comes in many forms but payment fraud over the internet is one that every business should be aware of and put steps in place to prevent. According to PWC, 50% of UK businesses have been victims of fraud in the past two years.

We hope you never need it, but here’s our handy checklist to help your business prevent and deal with internet payment fraud and why Business Fraud insurance is there to help protect your business.

How do people commit financial crime such as internet payment fraud?

Acting at once is the key in financial crime such as internet payment fraud

‘All things come to those that wait‘ according to the proverb but sometimes the exact opposite is true, reacting as swiftly as possible is paramount in cases of so-called Fake CEO and Payment Diversion fraud.

That‘s why you should follow the steps below to give you the best chance, in our experience, of recouping or reducing the loss of this financial crime or avoiding entirely:

1. Inform your bank immediately and provide all available documents.
   • Ask them to stop the transfer*.
   • If the money has already been transferred, ask the bank (if needed involving management) to send a SWIFT** message without delay that the transaction is suspected to be criminal fraud. Request they execute a reverse transfer of the sum and report suspected money laundering.
   • Obtain a copy of the SWIFT message for your records.



2. If you have an Allianz Trade Business Fraud Insurance policy, notify us and send all available documentation immediately.
   • We can agree together what measures need to be taken, including abroad, in order to stop any further loss.
   • The sooner you contact us, the better the chances of finding a way to recuperate the loss or at least contain it.
   • The longer you wait, the better chance the criminals have to transfer the money onwards, making it more difficult or even impossible to recover.



3. Report the loss to the police attaching all the relevant documentation.
   • Decide together with them the best way to proceed, especially as regards to any requests for legal support in foreign jurisdictions.
   • Obtain the case file number and wherever possible the name of the employee in charge of the case and pass this information to us.



4. Make your employees aware of the details of our fraud warning for financial crime and alert them to the following warning signals:
   • If a new person suddenly appears in an existing email correspondence check the email address carefully. Often criminal use email addresses use an email very similar to the one you‘re familiar with, changing only a single letter or character.
   • Be suspicious if you receive an email from a member of the company’s management asking you to execute transfers of high amounts to foreign accounts. Always obtain confirmation of this through other channels, especially when you‘re requested to keep it strictly confidential and not follow the normal procedures. The instruction is often given to carry out the transaction involving a law firm which then gets in touch with you so check whether the law firm actually exist. Involving a law firm is a ruse designed to put further pressure on you and to bolster the appearance of the transfer.
   • Be suspicious when a business requests payment to be switched to a different account. Ask your contact person at the business to confirm this, e. g. in writing. When you reply, do not under any circumstances, use the contact data given in the suspicious email.
   • The criminals often try to swear you to secrecy or offer ‘help‘ to recover funds against a fee by referring to a regulatory body such as the Financial Conduct Authority (FCA) These bodies would never contact people asking them to transfer money to them. If you‘re unsure and want to check, hang up and contact the organisation directly. It‘s more than likely, the authority isn‘t responsible for the transaction in question and the mention of them is only designed to increase pressure and create the impression the transaction is legal and above board.

Business fraud insurance can help protect your business against financial crime such as internet payment fraud

Allianz Trade is a European leader in Business Fraud Insurance. From SMEs to multinationals, we give our business customers confidence in tomorrow.

Footnotes

^{*In electronic banking the transfer will, as a rule, already been made.}

^{**Banks communicate globally via the so-called SWIFT system. Secure messages can be sent between banks via this system extremely fast.}