Payment Fraud & Loss Prevention

RBC Treasury Solutions

September 16, 2015

Presenter: Greg Kent

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Introduction & Agenda

http://www.rbc.com/privacysecurity/ca/protec

ting-your-information.html

Fraud in General

Cheque Fraud – Risk Mitigation Solutions

Recognizing Electronic Fraud

Internal Fraud

Treasurer’s Checklist

Prevalence of Payment Fraud

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Percent of organizations who have

experienced attempted or actual fraud

Percent of of them report that the

number of fraud incidents has increased

Typical loss due to payment fraud$23,000

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*2014 AFP Payments Fraud and Control Survey

Fraud Across Payment Types

Payment Method % of organizations

subject to actual or

attempted fraud

Payment method most

responsible for losses

Cheques 82% 57%

Credit / Debit Cards 43% 23%

ACH Debits 22% 10%

Wire Transfers 14% 9%

ACH Credits 9% 1%

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*Source: AFP 2014 Payments Fraud and Control Study

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What is Cheque Fraud?

Fraud on the front of the cheque:

Counterfeit

Altered

Forged Drawer/Maker

Fraud on the back of the cheque:

Forged Endorsement

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Responsibility for Prevention?

Cheque Fraud Detection Partnership

The Issuer

The Receiver

The Bank

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Prevalence and Impact in Canada

Typical loss - $$?

Cheque Fraud attempts annually - $$?

Multiple attempts – prevalence

Target - business cheques. Why?

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What Does Cheque Fraud Mean to Your Organization?

Time/expense of investigations and risk mitigation

Financial Loss

Governance issues

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How Can You Protect Your Organization?

Daily Reconciliation

Reduction of cheques issued – shift to electronic payments

Maintain proper segregation of duties

Protect cheque stock – no windowed envelopes

Practice safe cheque writing practices

Shred trash that contains sensitive data

Control and update authorizations

Employment practices

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Cheque Fraud - Risk Mitigation Solutions

Electronic Balance & Transaction Reporting

Payee Match with Amount Verification

Cheque Imaging

Electronic Payments

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Recognizing Electronic Fraud

Protecting Your Business

Phishing emails are becoming more sophisticated and can be tricky to spot

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Phishing emails no longer only begin with a generic greeting such as “Dear

Client”. They may use your email address such as “Dear john.doe@abcd.com”

or even your name.

There is often a sense of urgency in the email encouraging you to respond

immediately.

Many emails have links that look valid but lead to a fake website. Here's a tip: move

your mouse over the link in the email until a small box appears with the URL (web

address). If the web address in the box is different from what you see in the email, the

link may lead to a fake site. Do not click on this link.

When in doubt contact the institution directly to discuss with a

representative prior to releasing any information.

Internet & Telephone Scams

Mystery Shopper Scam

"419" or Spanish Prisoner Scam from Nigeria

Sick Baby

Grandparent Scam

Phoner Toner Scam

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Cyber Security

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Tips to Help Protect Your Business

Be certain of the origin of payment

instructions

Be just as wary of phone calls asking for confidential

information as e-mails requesting confidential

information.

Don't trust caller ID Just because your caller ID displays a phone number or

name of a legitimate company you might recognize, it

doesn't guarantee the call is really coming from that

number or company. Caller ID spoofing is easy.

Ask questions If someone is asking for confidential information, ask

them to identify who they work for, and then check them

out by verifying with a known contact and call them

back.

Check it out To help you spot phishing emails and fake websites,

see the tips under Recognizing it at

http://www.rbc.com/privacysecurity/ca/email-and-

website-fraud-3.html.

Ensure your computer software is up-to

date

Important your computer software is up-to-date as

security patches are periodically released

Protect your banking information and never share your online password or

token information!

Treasurer’s Payment Security Checklist

Cheque Fraud

Wire Fraud

General Internal Controls

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Thank you!

Greg Kent

RBC Royal Bank

greg.kent@rbc.com

1(866)415-7365