Fraudsters Revive Old-School Scams, Now Enhanced By Technology

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Businesses lose billions of dollars to fraud each year, with smaller companies being often the most vulnerable. While technology dominates discussions around security, traditional methods are still dangerous and frequently overlooked. From check fraud to social engineering, these threats persist even as cybercrime evolves.

In fact, this past week, over 1,200 bankers gathered at the American Bankers Association National Convention, where CEO Rob Nichols highlighted the increasing prevalence of fraud facing Americans today.

He went on to say, “The scale of fraud taking place every day is a massive burden for our country, and for the millions of hardworking women and men whose lives are affected by it. It will take a united effort — with support from both inside and outside the banking industry — to win this fight, and ABA is committed to leading that effort alongside America’s banks.” Nichols also called for immediate government action to develop fraud prevention strategies, urging a whole-of-government approach that includes creating a dedicated Office of Scam and Fraud Prevention to address the growing fraud ecosystem.

As we close October, marking yet another Cybersecurity Awareness Month, we should remain vigilant and take the necessary steps to protect our finances all year long.

Top Fraud Threats Today

Fraudsters have become much more sophisticated and now blend old-school techniques with modern technology to exploit businesses that are focusing solely on digital security.

As a result of these strategies, here are three major threats to watch out for:

1. Check Fraud - Despite the increasing use of digital payments, check fraud has surged by nearly 400% since 2020 . Criminals intercept checks, alter amounts, and cash them before the victim even notices. Businesses that still rely on paper checks are particularly vulnerable because fraudsters can use chemicals to “wash” checks—changing the payee or amount. For example, you might write a check for $3,000, only to have a fraudster change the amount to $30,000 and cash it. If you’re not paying close attention to your accounts, it may be too late by the time you realize the money is gone.
2. Social Engineering – Some scammers have perfected the art of social engineering as a fraud tactic. It involves manipulating people into divulging confidential information or transferring money by gaining their trust. Fraudsters often pose as legitimate clients, vendors, or even internal employees to deceive businesses into making unauthorized payments. For instance, a fraudster may call your company to pretend to be a senior executive, urgently requesting a wire transfer to close a deal. In the rush of the moment, employees might not think twice before sending the funds. In a world where much of our information is published online, fraudsters have the ability to find information about your business, employees and leverage modern tools to target your business.
3. Wire Scams - Wire transfer fraud is yet another growing threat for both businesses and consumers. Fraudsters impersonate trusted vendors or partners, tricking businesses into wiring large sums to fraudulent accounts. These scams often rely on social engineering to create the appearance of legitimacy. Imagine receiving what looks like a routine invoice from a vendor you work with regularly, only to wire the payment to a fraudster’s account. By the time the error is discovered, the money has disappeared.

Steps to Safeguard Your Business and Finances

There’s also good news. People have the power to thwart these attacks. An important step to defend against these evolving threats requires simply paying closer attention.

Start by regularly reviewing your bank accounts. Checking your balances daily is one of the simplest yet most effective ways to catch fraud early, helping you to spot any unusual activity before it becomes a bigger issue. It’s also important to strengthen your security measures on all fronts—don’t just rely on digital solutions. Fraudsters are increasingly taking advantage of weak points in traditional systems, such as paper checks and in-person banking, so enhancing verification processes for larger transactions can go a long way in protecting your business.

In addition to these general practices, here are a few practical tips that can help safeguard your finances:

• Set up transaction alerts with your bank to catch suspicious activity in real time.
• Use two-factor authentication for accessing accounts and conducting sensitive transactions.
• Train employees to recognize red flags, like unexpected payment requests or unfamiliar vendor details. Proper training can prevent employees from unintentionally falling for scams.
• Evaluate your business processes. Your team may be following processes that were set up at a time when fraud trends were different. Do you have the right processes in place to help defend against bad actors?

Laura Criscione, Chief Compliance Officer at ConnectOne Bank often advises: "The best defense against fraud is vigilance. By keeping a close eye on your accounts and making sure your employees are informed about potential threats, you can prevent most fraudulent activities before they cause serious harm."

Taking these steps seriously can make all the difference in ensuring that your business remains protected from the many evolving fraud threats.

Fraud today is a mix of both old and new, which means businesses need to stay proactive in protecting their finances. By monitoring your accounts regularly and tightening your security protocols across both digital and analog methods, you can stay one step ahead of these evolving threats. Acting now can make all the difference in safeguarding your assets for the long term.

By Frank Sorrentino, Contributor