We have a new bank account

Recently, this company requested a Big Insurance customer to change our bank account information and to make future payments on invoices to the new bank account. We emailed our contact at the Big Insurance Company and, voilá, the monies were deposited in the new bank account with no confirmation callback. These situations are rife with the potential for fraud.

How it Happens

Today, social media sites and marketing materials of vendors often detail and offer information as to the vendors’ customers. Sometimes fraudsters hack the vendors’ network systems and have the ability to view the payment requests and billing information to customers. In many cases, a fraudster will email the vendor’s accounts payable department to provide new bank account information. Unaware of the fraud, the accounts payable department will change the bank account information and begin to pay invoices to the new bank account, which is owned by the fraudster.

[easy-tweet tweet=”Verification Outside the Ban can prevent fraud and double payments.” via=”no” usehashtags=”no”]

How to Stop the Fraud

When customers are requested to change bank accounts, the customers should contact their liaison on the contract or contact by alternative methods (outside the ban) such as phone, fax or text. Outside the Ban means by a method different than the method used by potential fraudsters to contact. Verifying the change can prevent having to pay twice for the same product. Also, when setting up a new vendor, extra precautions should be undertaken to avoid issues as discussed in this article. Customers should vet new vendors to determine:

1. Existence
2. Proof of insurance
3. Physical address
4. Secretary of State / CLEAR
5. Confirmation of:
   1. what vendor previously did work
   2. if prior vendor is still doing work
   3. why additions or change in vendor are being made
6. Perform on the job inquiries, if needed.

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DM Studler

DM Studler, M.Acc., CPA, CFF is the founder of SDC CPAs, LLC. and has worked employee dishonesty claims in excess of $82,000,000, both domestic and internationally. She speaks across the country on a regular basis and is highly esteemed among her colleagues.

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