Why Your End-of-Year Payments Could Be Opening the Door to Identity Fraud
End-of-year payment fraud presents a risk for businesses managing high volumes of invoices, supplier payments and bank account changes. As finance teams prepare for a busy trading period, fraudulent payment details can slip through routine transactions.
ABS Business Indicators show that company gross operating profits rose 5.8% in last year’s December quarter. With businesses processing more financial transactions during busy periods, a single overlooked detail can result in money reaching the wrong recipient and cause significant financial losses.
“Businesses can spend days or weeks of precious time checking invoices and approving payments, but if they can’t verify that the bank account belongs to the intended recipient, a critical gap remains in the process,” said Ramesh Menon, Chief Product Officer at Eftsure.
“Payment fraud doesn’t always involve an obviously suspicious request, and often looks more like a routine change to supplier details, making it critical for businesses to ensure verification is a standard part of their payment processes.”
Identity-related payment fraud can involve supplier impersonation, manipulated payment instructions or fraudulent changes to legitimate bank account details. Even familiar transactions can carry risks when organisations cannot independently verify the intended payment recipient.
Ramesh Menon identifies five considerations to help businesses reduce end-of-year payment fraud and ensure payments reach the correct recipients.
One: Verify Bank Account Changes Independently
Businesses should independently verify requests to change supplier bank account details, even when those requests appear to come from familiar contacts. A legitimate-looking email or request does not necessarily confirm that the proposed change is genuine.
Finance teams should contact suppliers using trusted phone numbers already stored in their records. They should avoid relying on contact information included in the change request. This provides an opportunity to confirm the request before updating payment records.
However, confirming that a supplier requested a change does not establish that the new bank account belongs to that supplier. Businesses must also independently verify account ownership before making payments.
Two: Don’t Let Urgency Override Payment Processes
Urgent payment requests and last-minute account changes deserve closer scrutiny, particularly during busy trading periods. Fraudsters can exploit end-of-year pressures and significant calendar deadlines when finance teams face higher transaction volumes.
Employees managing these workloads may prioritise speed over detailed checks, increasing the risk of overlooking fraudulent instructions. Businesses should therefore maintain clear escalation procedures for unusual requests or unverified payment details.
Organisations should also encourage employees to pause payments when verification remains incomplete. Staff need to feel comfortable questioning requests rather than processing transactions simply because someone has labelled them urgent.
Three: Check the Recipient, Not Just the Invoice
Approving an invoice does not necessarily confirm that the bank account listed belongs to the intended recipient. Businesses must consider how they verify supplier identities and payment details before releasing funds.
These checks are particularly important when onboarding new suppliers, paying individuals or updating existing bank account information. Finance teams should verify the recipient rather than relying solely on invoice approval.
Third-party verification services, including those offered by Eftsure, can help organisations check whether an individual’s or business’s identity matches the supplied bank account details. This adds another verification layer alongside existing invoice checks and payment approvals.
Four: Build Multiple Layers of Approval
Changes to supplier banking information should involve more than one authorised employee. Relying on a single person or verification point increases the possibility that incorrect account details will go unnoticed.
Businesses should require multiple authorised staff members to review and approve changes before updating supplier records. They should also restrict access to those records and maintain clear documentation of who requested, verified, and approved each change.
These controls help make payment security a consistent business process rather than relying entirely on individual employees to recognise suspicious activity.
Five: Make Verification Part of Everyday Payments
Payment verification should form part of routine financial workflows rather than becoming an additional check only when a transaction appears suspicious. Businesses should incorporate verification into existing processes for collecting, reviewing and changing payment details.
Regular reviews can help identify gaps in how organisations collect and verify bank account information. Finance teams should also understand what happens when payment details change and who is responsible for completing the required checks.
With end-of-year trading pressures approaching, reviewing these processes can help businesses spot weaknesses before fraudulent payment instructions cause financial losses.