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  Have you ever been scammed as a businessperson? The fraudster appeared to be real, he spoke of how he could help you get the best supplies for your business except that you had to invest some amount of money to get ahead. This scenario is not new in the business world. It is called authorised push payment (APP) fraud.
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What then is authorised push payment? Authorized push payments are normal transactions organizations and individuals make via online banking services. The payer approves the transfer and ‘pushes’ it from their account to the payee. On the other hand, according to Wikipedia, “Authorized push payment fraud is a form of fraud in which victims are manipulated into making real-time payments to fraudsters, typically by social engineering attacks involving impersonation.” Furthermore, these authorised frauds can also be related to investment scams where the victim is tricked into sending money for investments that don’t exist, and romance scams where the fraudster tricks the victim into thinking they are in a relationship. Authorized push payment fraud is a growing threat to many businesses. Make sure you understand this risk and you’re taking steps to mitigate it. APP fraud, also known as a bank transfer scam, is when criminals use manipulative tactics to lead someone – either an individual consumer or an employee of a business – to make a payment to an account controlled by fraudsters. In the face of growing real-time payment, APP fraud has become very attractive to fraudsters. According to ACI Worldwide, APP fraud surged by 41% in 2020. Experts have further warned that the fast adoption of FinTech services by all and sundry will come with the risk of cybercrime and digital payment fraudulence. However, quicker payments are convenient for genuine customers, but they also allow defrauders to commit fraudulent transactions at high speed and extract the funds before banks or the authorities can intervene. Therefore, protecting your business against fraud is the most pivotal. When there is very tight security against APP fraud, which minimizes financial and reputational risk to your organisation, it can contribute to a better customer experience and increase the chances of having repeat customers. This is why a business owner whose operation is fundamentally digitally must be very careful of APP fraud, which is fast becoming commonplace in the Nigerian digital business space. In this article, I lay out a few proven strategies to protect your business from authorized push payment fraud.
  1. Understand The Concept And Operations Of APP Fraudsters. 
The study reported that APP fraudsters use social engineering tactics, deception and impersonation. They are key drivers of this trend and were particularly widespread during the pandemic. This often involves perpetrators masquerading as genuine individuals or organizations and reaching out to their victims via channels including email, phone and text message. Social media also provides opportunities for criminals to elicit payments from their victims by advertising fake goods and investments. Therefore, it’s not every individual or organisation that reaches out to you that you must engage in business transactions with. Doing your due diligence is very pivotal before making decisions to work with anyone or any organisation.
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  1. Know The Warning Signs.
Another way to stay a step ahead of APP fraudsters is to ensure that your business and its employees are sufficiently enlightened on APP scams and the risks they pose. This awareness will minimize the risk of you falling prey to them. Offer thorough coaching  to your staff on the most common warning signs of these attacks, which include:
  1. Transfer requests that are out of the regular, such as a new payee being added or payments being made in a different currency;
  2. Submissions for payment that are marked as highly pressing or classified;
  3. Unusually large payments;
  4. Alterations in a supplier or business partner’s details, such as email address or contact number.
  1. Integrate Tech With Human Technique.
Integrating Artificial Intelligence (AI) and machine learning (ML) into your business operation can prevent your business from falling prey to the activities of these APP scammers.  However, don’t rely 100% on technology. Incorporate automated inspections and processes with human activities such as using call-backs to verify transactions. Your employees should also invest in building close connections with partners and suppliers, which will help them detect unusual and potentially fraudulent events.
  1. Don’t Deviate From Policy.
Another possible way of protecting your business from APP is to stick with international and local standard policies of digital payment and financial services transactions. It’s vital to follow clear policies and practices to mitigate the risk of APP fraud, and your staff should understand the implication of adhering to these standards at all times. For instance, payments shouldn’t be authorized if the identity of the payee or the authenticity of the request can’t be verified, no matter how much pressure is being placed on the employee to process it.
  1. Develop Channels Of Quick Response.
Finally, establishing on-ground channels of quick response against fraud can help you combat fraudulent actions and possibly recover your money. If you discover that you’ve been a victim of an APP scam, you must react quickly and report the incident to your bank and relevant law enforcement authorities as soon as possible. The quicker you take action, the better your possibilities of recovering the stolen funds.  It will also be easier for the people involved to report and document the details of the event while it’s still fresh in their minds. This will help the authorities do their job and also inform your efforts to avoid similar problems in the future. Featured image source: ACI worldwide
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This article was first published on 21st February 2022

nnaemeka-emmanuel

Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.

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