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Fraud Case Study #1

Posted by Mel Toy on Jun 26, 2017 22:00:00 PM

Topic: ALL

Case Study Blog Photo


With 74% of businesses targeted for payments fraud just last year*, we know how important providing our customers with resources, education and highly responsive solutions is. Working with customers who are headquartered in the state of Wisconsin and Minnesota gives us an advantage when it comes to mitigating the risk of fraud. Our teams are dedicated to educating our customers and helping them protect themselves before it is too late. In the event of a fraud, our security and treasury management teams act quickly on behalf of our customers. Although we have a better chance of protecting businesses due to our local advantage and savvy relationship managers, without the proper tools and practices in place, businesses are leaving themselves open to sophisticated schemes that not only reduce their bottom line, but may cause longer-term operational and sustainability issues for their business.


Unfortunately, with the prevalence of fraud, we see fraud attempts and actual payments fraud occur with companies on a regular basis. An example of one particular case came through an account takeover/Business Email Scam targeted at one of our customers. The fraudster was able to hack in to the company’s software and review emails, roles at the company, and then develop an email that looked like, and took on the personality of, the company’s president. The company’s accountant received the email that she believed was sent to her by the president of the company. The email instructed her to send an ACH payment per the email instructions. The accountant acted on the instructions and the ACH was sent to an account at another bank. Our customer alerted us and we immediately contacted the receiving financial institution. Unfortunately, the funds had been wired out of the country already and there were no funds in the account—the fraudster had quickly cleared it. Fraudsters will exploit vulnerabilities wherever they have the chance. Although there was a loss, we were able to close the account immediately to prevent any further losses.


If this company had properly utilized fraud prevention best practices as advised, including dual control (having separate employees initiate and approve all payments, paper and electronic), they would have had a much higher chance of preventing fraud. According to the latest ACFE study, organizations that were victims of fraud, but had implemented internal controls, suffered lower overall fraud losses and detected the fraud faster than those that had not implemented strong internal controls. Unfortunately, the trend for using fraud control measures to prevent ACH fraud is declining, and attempted ACH fraud is increasing*. Businesses are getting too comfortable, not being as diligent, and unfortunately they are paying the price.

At Bank Mutual, we pride ourselves on educating and being proactive preparing our customers to deal with the changing business environment. We want you to be protected in this environment where fraudsters are aggressively trying to steal from businesses. For more information or to get a fraud analysis for your company, please feel free to contact me directly at (414) 257-8216 or

*2017 AFP Payments & Control Study