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Avoid Direct Deposit Fraud - Part Two

Last month we brought you part one of this series on direct deposit fraud, shared from the e-newsletter we receive from the AIPB (American Institute of Professional Bookkeepers) The General Ledger. Of course it applies directly to businesses and bookkeepers but it's always good to be vigilant about checking the "from" field in any emails and of course exercising caution when it comes to clicking (or NOT clicking!) on links. These days you can't be too careful, sadly, and fraudsters do an excellent job of making things look, and sound very legit. Here's part two on "How to Avoid Helping Payroll Fraudsters" (find part one here)

The easiest way to commit direct-deposit fraud is to get you to do it for them without realizing it. Here's how. The fraudster sends you a fraudulent email that looks like it is from the employee, asking for a change in a deposit account. Or, the email may come from the actual employee’s email account that the fraudster hacked. And the email may use different approaches: If imitating an employee: “I’m in the middle of a bad divorce and don’t want my spouse to have access to my pay. I know you are working on (today’s/this week’s/etc.) payroll, so could you please change my account right away? What do you need from me to do this?” If imitating your CEO or other executive: “Hi [your actual nickname, job title and a return address just like your CEO’s!!!], I’m tied up, so please change my pay account for me, as follows.” If imitating an employee, manager, etc.: “I had to change my bank account because of some issues with the bank. Can you please change it for me? What do you need to do this?” Fraudsters get all the information they need to imitate the employee, CEO or executive by surfing social media and the internet. What to do: Telephone (do not email or text) anyone who emailed, texted or otherwise electronically asked you to change a bank account. You need to hear that employee’s (CEO’s, executive’s, etc.) confirmation. Do this every time and this kind of fraud won’t work. It’s actually pretty easy and so widespread that even the best, most reliable payroll services are vulnerable to this kind of fraud. Why funds disappear without a trace Fraudsters use the same reloadable gift cards—e.g., the ones you see in drug, grocery and other stores—that employees use as paycards. Each reloadable card comes in a little carton that has, on its face, the processor’s name—e.g., Amex, MasterCard, Visa—and the word “reloadable.” Each card also comes with its own private bank account. That’s right, the card’s purchaser gets an untraceable bank account for as little as $1.95. The carton includes the private bank account and routing numbers used to transfer funds from the card to the bank account. Purchasers must register the card with AMEX, Visa, etc., but anyone can do this with fake credentials—the card companies have no real verification system. Criminal purchasers get you to install their card’s routing and bank account numbers in your payroll system under a real employee’s name. When you process your payroll, you end up loading the funds onto the fraudulent paycard and the fraudster simply withdraws the funds. Thank you to the AIPB for this important and informative article.

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