Payment fraud: Steps to take if your business gets scammed

Issue 2 2022 Security Services & Risk Management

Payment fraud is a nightmare scenario for any business. Irrespective of size, companies face substantial financial and reputational harm resulting from fraudulent activity. Depending on the severity of the crime and the losses incurred, the very survival of the business may be at stake.


Ryan Mer.

Ryan Mer, CEO at eftsure Africa, a Know Your Payee (KYP) platform provider, says banking and payment fraud remains a serious concern as fraudsters use increasingly sophisticated methods to exploit process vulnerabilities and take advantage of human error.

A 2021 TransUnion report noted a significant surge in fraud and criminal activity related to financial services in South Africa, with fraud in this sector surging over 187% in the last year. An Accenture report from the previous year confirms South Africa had the third most cybercrime victims globally, resulting in losses topping R2,2 billion.

“The risk of payment fraud is not limited to any one sector or industry. Any business that makes use of Internet banking or EFT facilities is vulnerable. Fake invoices, business email compromise (BEC) and even insider scams have become worryingly commonplace,” says Mer.

What to do when the worst happens

Payment fraud happens most frequently when companies are paying invoices or doing payment runs. Mer says it’s important to remember banks require only the account number and branch code to process an EFT payment. This means the onus of making sure all payment details are correct and haven’t been altered or manipulated, is on the payer.

When payment fraud is discovered it’s vital to act quickly and methodically:

• Contact the bank immediately to freeze payments and/or accounts to prevent further monies from being stolen.

• Gather as much paperwork and bookkeeping relating to the theft as possible.

• In the event of internal fraud, ensure any laptops, tablets and mobile phones of employees are recovered and safely stored.

• Open a police docket as soon as possible.

• Contact the Southern African Fraud Prevention Service (SAFPS).

Prevention is better than cure

While there is a small possibility stolen money can be recovered, it is mostly not the case as the stolen funds are withdrawn very quickly. In any event, Mer says the process is likely to be time-consuming and costly. “Strict banking terms and conditions place responsibility on the account holder making EFT payments to ensure the accuracy and integrity of payee details. An additional challenge is the unfortunate reality of the South African Police Service (SAPS) being understaffed and under-resourced to deal with crimes of this nature.

“Creating a fraud prevention ecosystem is the most effective way to mitigate risk and stop payment scams in their tracks. Even the best ERP systems cannot protect you from a malicious employee while a platform like eftsure can help limit the risks of internal fraud and BEC attacks by quickly and easily cross-referencing the payments an organisation makes with verified bank account details, before every payment is released.

“Given the potential losses and the onerous process with no guarantees of recovering stolen funds, real-time prevention at the point of compromise just makes good business sense,” says Mer.




Share this article:
Share via emailShare via LinkedInPrint this page



Further reading:

SAFPS issues SAPS impersonation scam warning
News & Events Security Services & Risk Management
The Southern African Fraud Prevention Service (SAFPS) is warning the public against a scam in which scammers pose as members of the South African Police Service (SAPS) and trick and intimidate individuals into handing over personal and financial information.

Read more...
Rewriting the rules of reputation
Technews Publishing Editor's Choice Security Services & Risk Management
Public Relations is more crucial than ever in the generative AI and LLMs age. AI-driven search engines no longer just scan social media or reviews, they prioritise authoritative, editorial content.

Read more...
How can South African organisations fast-track their AI initiatives?
AI & Data Analytics Security Services & Risk Management
While the AI market in South Africa is anticipated to grow by nearly 30% annually over the next five years, tapping into the promise and potential of AI is not easy.

Read more...
Efficient, future-proof estate security and management
Technews Publishing ElementC Solutions Duxbury Networking Fang Fences & Guards Secutel Technologies OneSpace Technologies DeepAlert SMART Security Solutions Editor's Choice Information Security Security Services & Risk Management Residential Estate (Industry) AI & Data Analytics IoT & Automation
In February this year, SMART Security Solutions travelled to Cape Town to experience the unbelievable experience of a city where potholes are fixed, and traffic lights work; and to host the Cape Town SMART Estate Security Conference 2025.

Read more...
Stallion repositions itself as a services provider
News & Events Security Services & Risk Management
Stallion has rebranded as Stallion Integrated Solutions to reflect its expanded capabilities beyond traditional security services to delivering integrated solutions that enhance safety, asset management, and operational efficiency.

Read more...
Seven tips to help ensure your backup batteries work
Power Management Security Services & Risk Management
Load shedding is back, officially or not. Lance Dickerson offers seven tips to prolong the life of your power backup systems and ensure they perform as intended when needed.

Read more...
Cybersecurity best practice
Information Security Security Services & Risk Management
Breach and attack simulation has become an essential element of cybersecurity strategies in any modern business by allowing companies to actively detect and resolve vulnerabilities through real-world attack simulations.

Read more...
Historic Collaboration cuts ATM Bombings by 30%
Online Intelligence Editor's Choice News & Events Security Services & Risk Management
Project Big-Bang, a collaborative industry-wide task team, has successfully reduced ATM bombings in South Africa by 30,7% during the predetermined measurement period of November, December and January 2024/5.

Read more...
Keeping safety central to enterprise risk management
Zulu Consulting Security Services & Risk Management
[Sponsored] As employee safety becomes an ever-more critical aspect of corporate risk management, Risk-IO assists risk managers in ensuring a safe working environment, whether in an industrial setting, an office, or anywhere.

Read more...
Empower individuals to control their biometric data
Information Security Access Control & Identity Management Security Services & Risk Management
What if your biometrics, now embedded in devices, workplaces, and airports, promising seamless access and enhanced security, was your greatest vulnerability in a cyberattack? Cybercriminals are focusing on knowing where biometric data is stored.

Read more...