Survey: Fraud Hits Record High, Impacts 82% of Businesses

  • By Staff Writers
  • Published: 4/9/2019


Payments fraud continues to soar, as a record 82 percent of organizations reported incidents in 2018, according to the 2019 AFP Payments Fraud & Control Survey, underwritten by J.P. Morgan.

Large organizations were particularly vulnerable to payments fraud, as businesses with revenue greater than $1 billion reported a jump of seven percentage points year-over-year to 87 percent. Organizations with revenue less than $1 billion experienced fewer fraud attempts in 2018, down four percentage points to 69 percent from 73 percent.

Business email compromise (BEC) scams also set a record. Eighty percent of companies reported BEC fraud last year, up from 77 percent in 2017. More than half (54 percent) of organizations reported financial losses as a result of BEC, the first time since AFP began tracking this data that this number climbed above the 50-percent mark. More than three-fourths of companies are responding by adopting stronger internal controls that prohibit payment initiation based on emails or other, less secure messaging systems.

“Payments fraud is a persistent problem that is only getting worse despite repeated warnings and educational outreach,” said AFP President and CEO Jim Kaitz. “Treasury and finance professionals need to learn the latest scams and educate themselves—and perhaps more importantly—their work colleagues on how to prevent them.”

“It is equally important for businesses to mitigate against non-financial implications of payments fraud,” said Jessica Lupovici, Managing Director, J.P. Morgan. “Businesses stand to suffer reputational risk, which can be severe, expensive and require significant clean-up efforts.”

Other highlights of the 2019 AFP Payments Fraud & Control Survey:

  • 70 percent of organizations report being exposed to check fraud, a slight decrease from 2017. Checks continue to be most impacted by fraud; however check fraud continued to decline to its lowest level since AFP began tracking such activity.
  • 43 percent of organizations experienced direct financial loss as a result of payments fraud.
  • There is a noticeable increase in fraud activity via ACH debits and credits.
    • 33 percent of organizations reported ACH debit fraud—up from 28 percent the previous year.
    • 20 percent of organizations reported ACH credit fraud—up from 13 percent the previous year.

More than 600 treasury and finance professionals responded to the survey. More information about the survey is available here.

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