Fraud Prevention: The Layered Defense Approach

The Scheme
Your employees are the lifeblood of your business, but they also have the power to harm it for their own gain. Accounts receivable fraud is purely internal, where employees steal funds, in both online and offline settings, and then alter records via fake discounting/write–offs, faulty balancing, and fraudulent debiting. One of the more common accounts receivable fraud methods is called lapping, where employees continuously steal customer payments to cover previous customer payment thefts.

The Impact
According to recent estimates, 80% of the fraud cases are asset misappropriations, including accounts receivable fraud. (Report to the Nation on Occupational Fraud and Abuse. Association of Certified Fraud Examiners (ACFE). 2002.)

• Separate financial responsibilities and access rights among employees within your company to deter internal fraud
• Watch for behavioral red flags from employees like living beyond one's means, refusal to take vacations or unusually close association with a vendor or client

Explore Nevada State Bank's tools and solutions that help prevent accounts receivable fraud:

• Lockbox
  If your business relies on customer payments through the mail, lockbox service helps decrease the number of employee touches on each transaction and reduces the risk of internal fraud. Click here to learn more. Call us today at 866-950-2734, or contact your Relationship Manager to find out more about our Image Lockbox Services.

The Scheme
Your business can be targeted for ACH payments fraud by employees or outside criminals. No matter who's doing the defrauding, it's one of the easiest methods of fraud to commit. ACH payments fraud requires only a checking account number and a bank routing number, which are frequently collected from victims with the help of trojans and other malicious software.

The Impact
In 2014, 22% of organizations were affected by ACH debits fraud, while 9% experienced ACH credits fraud. (2014 AFP Payments Fraud Survey)

• Conduct all business on one or a few computers that don't allow for any other type of Internet usage
• Perform daily reconciliation of accounts to find unauthorized ACH debits
• Follow the same online precautions recommended in the Online Account Takeover section (see below)

Explore Nevada State Bank's tools and solutions that help prevent ACH payment fraud:

• IBM® Security Trusteer RapportTM Software
  FREE software that complements your antivirus and firewall software to help protect your login credentials, online communications and transactions. Click here to download Trusteer Rapport Software or learn more.
• ACH Positive Pay
  A tool that allows you to decide which ACH transactions your business allows to post, better avoiding unauthorized charges. Call us today at 866-950-2734, or contact your Relationship Manager to find out more about our Positive Pay services
• Dual Control
  Available through Business Online Banking and edoorTM, dual control helps to segregate duties and manage user access for any payment or administration function. Call us today at 800-693-7695 or contact your Relationship Manager to learn how you can take advantage of this feature.
• Transaction Limits
  A valuable component of Business Online Banking and edoor, transaction limits allows an authorized representative to complete an outgoing electronic payment only up to a specified amount. Learn more by calling us at 800-693-7695 or contact your Relationship Manager.

The Scheme
Both outsiders and insiders can steal from an organization by committing wire fraud. Employees do it by creating fake vendor accounts with which to pay themselves. Other wire fraud criminals pose as vendors you already work with and request that you send payments. These requests usually come via email or phone call.

The Impact
In 2013, 14 percent of organizations were affected by wire transfer fraud.(2014 AFP Payments Fraud Survey)

• Call to verify all new payment instructions using a number already on your records
• Set transfer limits

Explore Nevada State Bank's tools and solutions that help prevent wire fraud:

• IBM® Security Trusteer RapportTM Software
  FREE software that complements your antivirus and firewall software to help protect your login credentials, online communications and transactions. Click here to download Trusteer Rapport Software or learn more.
• Dual Control
  Available through Business Online Banking and edoorTM, dual control helps to segregate duties and manage user access for any payment or administration function. Call us today at 800-693-7695 or contact your Relationship Manager to learn how you can take advantage of this feature.
• Transaction Limits
  A valuable component of Business Online Banking and edoor, transaction limits allows an authorized representative to complete an outgoing electronic payment only up to a specified amount. Learn more by calling us at 800-693-7695 or contact your Relationship Manager.

The Scheme
Criminals have advanced methods for stealing credit card data online. Once they have the information, they proceed to spend your money through either withdrawals or purchases. Credit card theft is one the most prevalent methods of fraud and can usually be attributed to visiting a fake (phishing) website where you attempt to make a transaction.

The Impact
65% of organizations detected transactions executed with their stolen credit cards in 2013. (RSA–2013 Fifth Annual Online Fraud Benchmark Report)

For businesses that experienced attempted or actual payment fraud in 2012, 43% cited credit cards as the method used.(2014 AFP Payments Fraud Survey)

• Make purchases from trusted, secure websites
• Set up purchase alerts on your credit card
• Review account activity frequently
• Set usage restrictions for transaction type and amount
• Never send financial information via regular email (it's insecure and easily compromised)

Consider this tool that can help prevent credit card fraud:

• EMV
  A security chip is being implemented in all debit and credit cards. Nevada State Bank will offer updated point-of-sale devices, to help businesses transition as EMV cards become the standard. For more information, please visit our EMV FAQs, contact your Relationship Manager, or call our Merchant Services group at 1-800-457-9913.

The Scheme
As technology progresses, fraudsters enjoy easier access to equipment for reproducing fake checks. Such "bad checks" often accompany lottery scams, check overpayment scams, internet auction scams, and secret shoppers scams.

Check washing involves erasing details from a check. Once cleared of its details, criminals can use a check to make fraudulent withdrawals and other types of theft. These checks are most frequently stolen out of mailboxes when someone sends a bill payment.

The Impact
In 2013, 82% of organizations experienced actual or attempted check fraud. (2014 AFP Payments Fraud and Control Survey)

• Mail all bill payment checks directly from the post office
• Use a special "check writing" pen, available at most office supply stores
• Order checks with chemically–sensitive paper
• Pay your bills online
• Check your bank account often to see what checks have cleared
• Recognize signs of bad checks, including: no perforations, missing check number, mismatching fonts, handwritten additions, missing address and stains or discoloration
• Be wary of a low check number (101–400 on personal checks or 1001–1500 for business checks); 90% of bad checks are written from accounts that are less than a year old

Explore Nevada State Bank's tools and solutions that help prevent check fraud:

• Lockbox
  If your business relies on customer payments through the mail, lockbox service helps decrease the number of employee touches on each transaction and reduces the risk of internal fraud. Click here to learn more. Call us today at 866-950-2734, or contact your Relationship Manager to find out more about our Image Lockbox Services.
• Remote Deposit
  A convenient service allowing your business to deposit checks right from the office with a certified scanner. Click here to learn more. Call us today at 800-950-2734, or contact your local Nevada State Bank Relationship Manager to find out more about Remote Deposits from Nevada State bank.
• Positive Pay
  A notification service that can give your business increased control over which checks to return or approve for payment. Call us today at 866-950-2734, or contact your Relationship Manager to find out more about our Positive Pay services

The Scheme
When a criminal obtains your personal information or login data, they can sign up for credit cards, transfer money and complete other transactions to steal money, all while posing as you. Online, this type of fraud is achieved via phishing scams, malware forcefully installed on your computer and phony websites made to look legitimate so they can steal your log–in credentials.

The Impact
Of the businesses that detected a fraud attempt in 2012, 71% reported that the scheme was online account takeover with fraudulent money transfer. (RSA–2013 Fifth Annual Online Fraud Benchmark Report)

• Keep fundamental computer security features up–to–date, including operating systems, firewalls and antivirus software
• Never download or install files from unknown sources
• Don't click on web ads or pop–ups
• Access the bank's website by typing or bookmarking www.nsbank.com instead of clicking links.
• Look for the "s" in "https://www.nsbank.com" when you arrive at the Nevada State Bank website.
• Don't respond to unsolicited emails, open their links or view their attachments
• Be aware of inappropriate web surfing activity on computers you use to access online banking. (That is how a lot of malware is loaded onto your systems.)

Explore Nevada State Bank's tools and solutions that help prevent online account takeovers and enrollment fraud:

• IBM® Security Trusteer RapportTM Software
  FREE software that complements your antivirus and firewall software to help protect your login credentials, online communications and transactions. Click here to download Trusteer Rapport Software or learn more.
• Dual Control
  Available through Business Online Banking and edoorTM, dual control helps to segregate duties and manage user access for any payment or administration function. Call us today at 800-693-7695 or contact your Relationship Manager to learn how you can take advantage of this feature.
• Transaction Limits
  A valuable component of Business Online Banking and edoor, transaction limits allow an authorized representative to complete an outgoing electronic payment only up to a specified amount. Learn more by calling us at 800-693-7695 or contact your Relationship Manager.
• One Time Password (OTP) Token
  A security enhancement, which uses one–time passwords to further protect and authenticate a business's online transactions.