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As regional banks continue to endure existential pressures, businesses are being cautioned to protect themselves against scammers attempting to deceive Accounts Payable teams with falsified banking information.
Stampli, a leading provider of AI-powered Accounts Payable automation, warns that fraudsters are posing as legitimate vendors and pressuring companies to update payment details with fraudulent account information.
In this scam, impostors contact Accounts Payable departments, pretending to be existing vendors and claiming that they need to switch banks. They request that the vendor’s payment details be modified to include false account information. These fraudulent messages often employ urgency, pressuring recipients to take immediate action without verifying the information provided.
The success of this scam is attributed to the fact that many vendors are genuinely switching banks in response to the ongoing banking uncertainty, making it difficult to discern fraudulent requests from legitimate ones.
To prevent Accounts Payable fraud, Stampli recommends implementing the following measures:
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Independently verify account change requests through existing vendor contact methods, regardless of the contact information provided in the request.
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Scrutinize email addresses carefully, as scammers often create addresses that closely resemble legitimate ones.
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Maintain accurate and up-to-date vendor information to facilitate verification processes for change requests.
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Educate employees, especially those in Accounts Payable, about common scams and pressure tactics, ensuring adherence to established business protocols.
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Establish a reporting mechanism for sharing and validating suspicious requests.
As CEO of Stampli, my personal advice is simple: Never assume you’re not under threat. Any time money is changing hands, you should assume there are scammers looking for a way to get their hands on it. The good news is that with proper protocols and tools, accounts payable teams can stop fraud before it starts.
Real-Life Example: How CSS Farms Thwarts AP Fraud
CSS Farms, the nation’s leading potato grower, employs rigorous procedures to safeguard against Accounts Payable fraud. With multiple facilities across 10 states, CSS Farms processes thousands of invoices each month. Vanessa Larimore, Accounts Payable Manager at CSS Farms, tells us that fraudsters do attempt to modify vendor bank information. However, thanks to stringent policies and additional validation measures, no fraudulent attempts have succeeded.
Larimore explains, “When it comes to banking information, we have a number of policies in place that require double checks or extra validation. For example, if we receive a payment-related email from a vendor, we never call the number they give us – instead, we always Google the main number. In addition, we have software-based controls, such as requiring secondary approval to change a vendor’s bank details, which doubles the likelihood that any fraudulent activity will be caught.”
Larimore also recommends the use of account validation software provided by her business bank. This tool enables quick verification of account owner information and real-time assessment of account risk levels. Suspicious accounts, such as recently created ones, are flagged for further scrutiny.
“The best practice is to never take an email at face value,” advises Larimore.
Stampli’s AP Automation Solution Enhances Fraud Protection
Stampli offers an AI-powered Accounts Payable automation solution that consolidates all AP-related communication, documentation, and workflows into a centralized platform. This integration provides various benefits, safeguarding against the described fraud scheme and other types of fraud. These advantages include:
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An invitation-only Vendor Portal that adds authentication barriers, hindering fraudsters’ ability to misrepresent themselves
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Automatic notifications for AP staff to securely review and approve changes made to a vendor’s bank information, with a comprehensive audit trail of all modifications available to the AP team.
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Configurable payments that can be set to process only when a vendor is fully compliant with company policies, such as required documentation or verified bank details
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Vendor records can only be created in the ERP and synced to Stampli, keeping the ERP as the source of truth and ensuring permissions for vendor creation are strictly controlled
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Multi-factor authentication for AP staff accessing sensitive vendor and payment information, reducing the risk of unauthorized account access.
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Strict segregation of duties, preventing any single individual from having privileges to both pay bills and update bank details
Among the many benefits of Stampli’s AP automation solution are the numerous safeguards that help prevent fraud. A combination of vigilant policies and robust tools makes a company more difficult for fraudsters to target.
For more information about AP fraud, please refer to Stampli’s article, What Silicon Valley Bank Teaches Us About the Need for AP Automation.
Author’s bio
Eyal Feldman is Founder and CEO of Stampli, an AI-powered Accounts Payable automation solution that makes AP departments far more efficient, without requiring them to rework their ERP or change their existing processes. Stampli’s unique approach centers all AP-related communication, documentation, and workflows into one place for complete visibility and control.
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