3 Lucky Tips for Not-For-Profits to Avoid Bank Fraud

Trusted Insights from The National Bank of Indianapolis Nonprofit Services Team

Not-for-profit organizations are increasingly falling victim to fraud, with a rising number of incidents and an ever-growing amount of money being lost.

Fraudsters find it easy to target not-for-profits, as their publicly available 990s provide valuable information. Protecting your organization from such fraudulent activities can be a challenging task.

However, you can decrease the chances of fraud within your not-for-profit organization by following the three tips discussed below.

Employee Education

Employee education is critical to protecting your organization.

Since workers are reportedly the top source of security incidences, employee engagement is essential to combatting data breaches.

Employees need to know how to recognize and should feel comfortable reporting any incidents to prevent a breach.

The most common errors made by employees are deceiving phishing scams, weak passwords, mistyping email addresses, and not keeping the most up-to-date security patches.  Check with your banking partner for fraud training resources.

Fraud Prevention Services – Positive Pay and ACH Debit Filter/Blocker

Mail related check and ACH fraud continues to be very prevalent. When a paper check is intercepted, the fraudster can alter the check and attempt to cash it, or they may use the account and routing number to commit ACH fraud.

In an effort to reduce check and ACH fraud, all banks offer fraud prevention services – Positive Pay and ACH Debit Block/Filter.

One of the strongest defenses available to prevent check fraud is Positive Pay. It enables you to monitor and control the checks presented against your accounts so that only authorized items are paid.

With your busy schedule, Positive Pay gives you the assurance that your account is automatically being monitored daily for possible fraudulent checks.

ACH Debit Block and Debit Filter Services provide the protection your organization needs to combat ACH fraud.

ACH Debit Block prevents the posting of ACH debits, ACH credits, or all ACH entries to a designated business checking account at your authorization. ACH Debit Filter allows the posting of only pre-defined authorized ACH debit transactions.

It is important that you implement these services to protect your accounts and prevent a lapse in your organization’s insurance coverage.

Business Email Compromise

Business email compromise is another growing trend where a scammer uses email to trick someone into sending money, divulging confidential information, or requesting change in payment instructions via ACH or wire.

All changes to payment requests need to be verbally confirmed with a contact outside of the email requesting the addition/change.

What if Your Organization Experiences Fraud?

If you experience fraud, contact your banking institution immediately. The most successful time to recover funds is within 24 hours.

Outside of that period, success rate for recovery drops dramatically; therefore, it is important to monitor your accounts daily.