It's always the time to be alert about fraud

by Kevin Louie, Senior Vice President / Commercial Banking Group Manager, Scott Valley Bank

Maybe it’s the season, but I’ve received several emails like the following recently:

I will like to place an order, and will be glad if you can refer me to your sales team, and please confirm with me if you accept credit card for payment would their be any surcharge fees included? The shipment would be sent to Thailand but you don't need to worry about the postage, I have a personal carrier that would handle that, all you need to do is to get the order ready for collection once it has been paid for.
Kindly get back to me so as to proceed.
Thank you

Another email….

I wish to request for your legal services and possible representation on a legal matter involving failure to fulfill contractual obligations. Please do let me know if your office is currently accepting new clients
Mr. M.

I’m neither a seller of some type of product nor an attorney at law. I did contemplate going to law school once, maybe Mr. M. knew that. I am a Banker; so, why am I receiving these emails?

Clearly, each of these emails is intended to defraud its recipient. The first is an example where the fraudster will buy large quantities of product using stolen credit cards for payment. The seller thinks they have made a huge sale overseas, only to receive chargeback notification from their merchant card provider.

The second email is an overpayment scam. You are sent a check for your legal services. The check is more than your fee and you are instructed to wire transfer the difference back. Of course, the cashier’s check you deposited is fraudulent but you have already sent the overpayment out.

As a business owner, your company is the driving force to meet your financial goals. Unfortunately, there are organizations and people out there who continually find ways to scam companies and consumers. The two fraud emails are not new and very obvious as such, but they continue to work.

Some years ago, I attended a fraud seminar with a presentation by Frank Abagnale. For those of you not familiar with the name, you might want to watch the movie Catch Me if You Can in which Leonardo DiCaprio portrayed Mr. Abagnale.  Between the ages of 16-21, Mr. Abagnale impersonated the following professions: attorney, pediatrician, college professor and an airline pilot. He cashed $2.5 million in fraudulent checks in every state and 26 foreign countries. It took months for him set up his fake identity before being able to produce and cash fraudulent checks. However, given current technology, fraud can easily be committed with the use of a computer anywhere and with very little time.

ACH and Wire fraud have been quickly on the rise in the recent years. ACH and wires transfers are the fastest method of sending money from one person/business to another. Keylogging is action where your keyboard input is monitored by thieves. They will capture your username and password to later login to perform high-dollar ACH or wire transfers. This is often done by the installation on your computer of malware or malicious software which is hidden in fraudulent websites and links. Once this websites and links are opened, the tracking software is installed and the keylogging begins.

Phishing, Vishing, and SMShing are methods thieves use to collect sensitive information. 

“Phishing” is typically in the format of an email either directing users to enter details or containing links to fake websites infected with malware. 

“Vishing” is an attempt to collect sensitive information via phone; often thieves are impersonating agents of the bank or credit card company.

SMShing” is the use of text messages on cell phones to direct the reader to fraudulent sites.

Awareness is critical in protecting your business. We now have to protect ourselves from both paper and electronic fraud.  Here are some preventative measures you can take:


  1. Use high-security check stock

  2. Lock up check stock and all sensitive documents

  3. Periodically audit check stock to ensure unused checks are accounted for

  4. Secure sensitive document destruction process

  5. Safeguard incoming and outgoing mail

  6. Use gel pens that are designed to prevent check fraud. Normal ink in pens can be dissolved with water allowing for checks to be altered or “washed.”


  1. Up to date anti-virus software
  2. Keep firewall on
  3. Keep operating system up to date
  4. Turn off computer when not in use

Remember these measures only protect you from external threats.  Embezzlement can be devastating to the financial health of a business.  More times than not, the perpetrator is the “trusted employee” who’s been there for a long time and knows the system.

Consider these steps:

  1. Segregation of duties- payments and reconciliation of accounts
  2. Employee background screening
  3. Internal control procedures to secure passwords

Above all else, monitoring your accounts on a daily basis is critical. 

Take the time to be proactive and ensure you have the proper controls in place. If you are facing a questionable transaction, contact your banker as they see far more fraud attempts. They can give you feedback and provide additional services to protect your accounts.

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