Business Fraud Protection

Security Center
By: Kati Sessoms, Private Banker

As bankers, we see firsthand how quickly fraud can become a major crisis for our business members. Fraudsters are always looking for new ways to break through your defenses. Typical recommendations include safeguarding your network with firewall and antivirus software, setting strong password requirements that prompt you to change them every 60-90 days, and performing employee background checks when hiring.

But what about your bank accounts? How do you protect electronic payments that flow through your business daily? Are you covered in the event of a loss? These are questions every business owner should ask themselves and their banker. Some answers are as simple as employee training, while others may require an investment of time, energy, and expense. Your local TowneBank financial partner is here to advise you on the best plan for your business.

Protection with Positive Pay and ACH Fraud Control

Positive Pay and ACH Fraud control allow your employees or bookkeepers to determine whether certain checks should be paid or returned. These services are available within business online banking, and some decisions can even be made through the business mobile banking app. 

How does Check Positive Pay work? Let’s say your company sends out numerous checks for payments. With Check Positive Pay, an electronic file that includes identifying check information such as payment amount, payee name, date, check number, etc. This information is used to match posted check information to checks that are deposited. If the information does not match, the check is flagged and included in an exception report sent to you electronically. Upon review, you (or team members) can deny or approve the check payment, giving you more control over fraudulent checks in circulation. Using a system like check positive pay is like having a set of eyes reviewing every single check that leaves your company and then giving you the control to make the decision.

What if your Company Uses ACH payments? Companies that use ACH transactions for payments would greatly benefit from ACH Fraud Control because fraudsters only need an account and a routing number to commit this fraud. It's important to know that federal regulations protect consumers from ACH fraud, but technically, banks are not required to reimburse businesses that fall victim to this crime.

With ACH Fraud Control, you can limit what ACH transaction amounts need to be reviewed. You can receive a detailed report on debits that hit your account; you can customize these settings to fit your company’s needs. You can also create a two-step process to approve transactions over a certain limit, this is called Dual Control. 

Set Up Dual Control

You may have heard this term from your banker or treasury services advisor – but what does it mean and why is it important? Dual control simply means setting up certain transactions or transaction amounts that require a two-step approval process. Often, banks will use something called ‘tokens’ for these approvals. As transactions are set up in online banking, the authorized user also receives a one-time passcode through either a physical device or an authenticated app on their mobile phone. The user inputs that code to provide final approval for the transaction. Transactions cannot be completely conducted without that one-time passcode, which fraudsters won’t have.

Pay Bills Online to Avoid Paper Statements Falling into the Wrong Hands

Beyond the environmental benefits, going paperless can prevent fraud. Unfortunately, mail fraud has increased, with cases surging over 400% since 2019. Criminals are using items sent through the mail to gain enough valuable information to build a profile (whether it's on a person or a company) and then finding other ways to fill in the blanks such as through a phishing scheme or phone calls. These criminals often seek to intercept checks, bank statements, and anything with valuable information. Often, your online banking access is more secure than your mailbox so it is important to go paperless whenever possible. If you'd like to learn how to go paperless in Business Online Banking, refer to our demo here.

Separate Your Personal & Business Bank Accounts

Maintain separate bank accounts for business and personal funds. It might mean a separate login, but you’ll have peace of mind knowing that no one accessing your business accounts can get to your personal accounts.

Insurance Can Help to Mitigate Loss 

We don’t drive our cars preparing for an accident, but we have car insurance to cover us if the unexpected happens. Insurance coverage to protect your company from cyber liability and data breaches is just smart business in today’s world. Talk to your financial professional about the right coverage for your business.

About Kati Sessoms, Private Banking Officer, TowneBank

Kati is a Private Banking Officer based out of the TowneBank Financial Center in Raleigh, NC. She has over 20 years of experience in the financial services industry. She began her career in banking after graduating from Eastern Illinois University and has held positions in branch management, treasury management and sales, and now focused on offering her expertise to TowneBank business members.

Learn more about Kati

Business Fraud Protection FAQs

  • ACH Payments are processed through the Automated Clearing House Network, a secure centralized network, financial institutions can use to transfer funds safely and securely.
  • As a business, if you provide ACH payment processing for your business or clients, your company is ultimately liable for ACH payment fraud, per Regulation E.
  • Treasury Services are a set of electronic banking services for businesses that can help to digitize accounts receivables, accounts payables, and reporting. Often banks will also provide fraud protection for businesses as part of these services, as well.
  • Wire transfers are reliable and secure forms of transfer payments that are settled through the Federal Reserve, usually within minutes.
  • Wire fraud refers to the criminal act or attempt to commit fraud with the aid of some type of electronic communication - typically through email or phone.

    Learn more here.
  • With Business Online Banking services, you can launch robust fraud protection services such as ACH Fraud Prevention, Check Positive Pay and more. Remember, employee training is important as well. We have several articles in our resource center to help you get started such as:
    1. Protect Your Company & Customers Against Fraud
    2. Business Email Compromise The $26 Billion Scam
    3. Training Employees to Prevent Fraud
    4. Building Safe Vendor Relationships

Your mobile carrier's text and data charges may apply. 

All terms applicable to online banking apply to mobile banking. 


Want to learn more about tools to protect your business from fraud? Contact our Treasury Team

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