Five Ways to Prevent Payment Fraud

How Smart Enterprises are Using Technology
to Mitigate Risk

Duplicate payments, miscalculations, unsupported payment claims, services not rendered, ineligible beneficiaries, and outright fraud by employees and others. As criminals become increasingly savvy on ways to circumnavigate safeguards, enterprises face the never-ending test of payments risk management.

Many improper payments continue to go unidentified due to inadequate internal controls or system deficiencies. The risk of improper payments is highest in situations demanding expedited payments or complex criteria for computing them. Today, these factors are amplified across a growing number of enterprises and government programs that disburse high volumes of payments. In the new age of Sarbanes-Oxley, many organizations are turning to technologies from Bottomline to protect against duplicate payments and other prevalent types of fraud by centralizing payments monitoring and control.

Sophisticated risk management functionality embedded in Bottomline's WebSeries® Payments Risk Management module allows users to identify and prevent loss before it can occur. Following are five uses of this technology for mitigating payment risk.

1. List Checking
   Individuals and businesses can easily use variations of names to avoid detection rendering simple direct name matching practices insufficient. Offering powerful matching capabilities, WebSeries' name variation algorithm enables users to generate scores of name variations for a single individual on a list. WebSeries supports a wide range of ineligible lists, including OFAC SDN, FBI, FinCen, Prisoner, TANF Violators, Store Owner Trafficking, and other internal and external lists.

   In addition to helping enterprises monitor and prevent payments to ineligible recipients, the WebSeries Payments Risk Management module can also help insure against improper payments by verifying issuances against key eligibility databases, including valid employees, approved vendors and eligible benefit participants.

2. Scrutinize Suspect Payments
   More devious program participants, vendors and employees may try to figure out simple AP approval rules and submit invalid requests for payment (invoices, program requests or enrollment) that they know would get paid without review. The WebSeries Payments Risk Management module enables organizations to catch suspect payments by monitoring irregular payment volume under certain thresholds.

3. Catch Duplicate Payments
   In many cases due to inefficient practices, by the time a payment is processed or mailed, a payee has already complained about late payment, and in some cases may have requested a check to be written on demand. The WebSeries Payments Risk Management module flags duplicate payments, such as checks written to the same person with the same amount within a defined time window, and can help reduce unnecessary or duplicate issuances.

4. Monitor Payee Addresses
   Some criminals know that companies cross check their payments with a list of names to identify fraud. Bottomline's WebSeries Payments Risk Management module allows you to stay one step ahead by checking for the same payee address as well. By identifying checks and electronic payments written or originated to different payee names, yet mailed to the same address, WebSeries extends the effectiveness of your fraud prevention tactics.

5. Track Payee Bank Accounts
   Fraud prevention shouldn't be limited to monitoring paper checks. Use WebSeries to identify electronic payments made to different payee names with the same bank account number. Rogue employees or vendors could make or request fictitious payments to a friend or relative with whom they share a bank account. Tracking trends for frequent or multiple low-dollar amount items paid to the same account is also particularly helpful in identifying fraudulent activity.

For more information on the WebSeries Payments Risk Management module, download a data sheet, contact your local Bottomline solutions representative or see our story Who are You Really Paying? in this issue of The Bottomline.