Understand Business Fraud and How to Prevent It

Identity Protection
Understand Business Fraud and How to Prevent It

From internal fraud committed by employees to external fraud perpetrated by cybercriminals, business fraud has become a pressing concern that cannot be ignored. According to a 2022 report from the Association of Certified Fraud Examiners, businesses that fall victim to fraud lose a median of $120,000.

Businesses of all types are vulnerable to fraud. Large corporations are no strangers to the sophisticated techniques cybercriminals use to exploit system vulnerabilities, plant malware and engineer other schemes. Small businesses may lack the robust fraud prevention systems of their larger counterparts, and as a result, may be vulnerable to attacks.

At Ameris Bank, protecting your business is our top priority. In addition to providing comprehensive treasury management services and security options, we are proud to offer the following strategies and techniques that can be used to mitigate fraud inside or outside of the banking system.


Business fraud is categorized as internal or external. Internal fraud is committed by someone who works within a business. Some types of internal fraud include embezzlement, falsifying records, theft of company assets, misuse of company credit cards and unauthorized use of company resources.

External fraud is committed by someone outside a business, such as a computer hacker. Examples of external fraud include phishing emails, ransomware, malware, fraudulent transfers of funds, check fraud and fake or inflated invoices.

Sometimes, an employee colludes with someone outside the company on a fraud scheme. For example, a bookkeeper conspires with a third-party vendor to create a fake customer account. The bookkeeper then issues payments to that account, and both parties share the stolen funds.


A growing arsenal of solutions is available to business owners to prevent and detect internal and external fraud, including multi-factor authentication, encryption techniques, secure payment gateways, robust firewalls and anti-virus software. Companies that invest in these and related solutions add an extra layer of protection against hacking, financial theft and unauthorized access to sensitive information.


Internal controls refer to a system of policies, procedures and practices that are put in place to deter fraud and ensure the accuracy, reliability and integrity of a business's financial information. Business owners should consider their company's size, structure, industry, risk factors and overall objectives when developing an internal controls plan. An optimal system will have preventive, detective and corrective controls.

  • Preventive controls are designed to prevent errors and fraud; they include assigning specific duties, limiting IT and system access, performing data backups and conducting employee background checks.
  • Detective controls are used to pinpoint the cause of an issue, such as a data breach or stolen funds. Some standard detective control measures include weekly or monthly transaction reconciliations, physical inventory counts and surveillance systems.
  • Corrective controls are deployed if a fraudulent issue or activity occurs and must be resolved to prevent it from happening again. Corrective control activities include software and device upgrades and updated training materials.


This is where dual controls come into play. With dual controls, only one administrator can create an ACH transaction or wire transfer, and a second administrator is responsible for reviewing it prior to releasing it.

Because different individuals create and execute ACH transactions and wire transfers, the chance that someone within the business can get away with financial fraud decreases. Companies can go one step further and set monetary transfer limits and create an authorized user list for automated transactions.


Social engineering fraud is a tactic used by cybercriminals to deceive and manipulate employees into divulging confidential information or performing actions that compromise the security of a business. These fraudsters often exploit human vulnerabilities such as trust or curiosity to achieve their objectives.

Phishing email scams are among the most common forms of social engineering fraud. Scammers also use pretexting, which involves impersonating a business employee or trusted third-party associate and tricking them into providing personal information that can be used for malicious activities.

Next on the list is baiting, in which fraudsters send emails to business employees that offer a free download or product if they click on a link and provide their company login and password.

Email filters and spam protection tools are crucial in helping prevent social engineering attacks. These tools analyze incoming emails and flag those that exhibit suspicious characteristics or contain potentially harmful links or attachments. By blocking these emails from reaching employees' inboxes, businesses can significantly reduce the risk of falling victim to social engineering scams. Of course, companies should train employees on the risks and warning signs of social engineering attacks and keep detailed information in their employee handbook.

Looking for more tips? Visit our online Cybersecurity Center for the latest security news or contact a member of our Treasury Services team to learn more about Ameris Bank’s robust fraud prevention services.

Published October 2023

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

ACFE, Occupational Fraud 2022: A Report to the Nations

Information presented in the Financial Advice website is provided for educational purposes only and is not related to Ameris Bank's actual products or services. Ameris Bank makes no representations as to the accuracy, completeness or specific suitability of any information presented. Information provided should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. Ameris Bank recommends you consult a professional for any specific guidance you are seeking.