Paper Checks the Preferred Method in B2B Payment Fraud, Survey Finds

More than half the U.S. companies polled in a recent survey—56%—said they were the target of at least one business-to-business payment-fraud attempt in 2022, with paper checks the leading fraud type.

Furthermore, 43% of companies said they had been targeted more than once, and 12% said they had been targeted more than 10 times, according to findings released Tuesday. The survey sponsors were Trustpair, a Paris-based anti-fraud technology provider for more than 200 large companies worldwide, and Allen, Texas-based Giact Systems, which provides identity and authentication services.

Asked which types of payment frauds were most successful, 56% of respondents flagged paper checks while 36% said card payments and 33% said wire transfers. The survey report says it’s not surprising that checks play a big role in fraud since 40% of U.S. companies reportedly still use paper checks.

Five percent of respondents reported $1 million or more in direct financial fraud losses, while 75% reported losses of less than $100,000, 17% losses of $100,001 to $500,000, and 2% losses of $500,000 to $1 million.

Most executives are bracing for more fraud. Fifty-six percent of respondents said they expect fraud attempts to increase this year. Only 11% of U.S. companies think they will face fewer fraud attempts while 33% expect no change in attempts.

“We can definitely say that the pace of payment fraud isn’t slowing down,” Baptiste Collot, chief executive and co-founder of Trustpair, said in a statement. “A decade ago, fraud was manual. Nowadays, it’s sophisticated and complex. It should be a big concern for any company.”

The e-mail survey was conducted by ALM Global LLC’s Treasury & Risk, a publication for corporate treasury and finance professionals, between Feb. 2 and March 2. Seventy-five executives and managers responded. The survey report did not disclose the margin of error.

Some 55% of responding companies said fraud was perpetrated when changes were made to supplier credentials. Thirty-three percent of respondents traced fraud attempts to business email compromise and phishing.

To reduce fraud risk 53% of surveyed companies said they had changed their payment processes in the preceding 12 months. But 70% use human callback to verify supplier account-information changes, which Trustpair and Giact said is a time-consuming manual process, especially for large companies with thousands of suppliers.

The two firms announced Tuesday that they had forged a “strategic partnership” through which U.S. finance professionals will be able to access Giact’s data source directly within the Trustpair platform. Trustpair’s offering will provide international coverage for real-time and secure account verification that can be accessed worldwide.