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Beware! Diversion Scams on the Rise

Forget about the Prince who needs help moving his fortune and the CEO who needs money wired urgently. As more people get wise to those scams, criminals have evolved ever more sophisticated schemes to part us from our money. A payroll diversion scam that hit the scene about 2 years ago is now being targeted at businesses of all sizes, in all industries, and all geographic locations.


After a paycheck has been diverted to a fraudulent bank account, it is difficult to retrieve those funds. Employers are often left holding the bag; out those stolen funds, AND having to pay the employee again for the missing paycheck.


Below are linked some articles where you can learn more about these diversion scams. And here are some ideas to reduce the risk that your business and your employees are caught up in one of these scams:


  • Review your policy for how employee banking changes are handled. Do you use a form to request a banking change? Are requests routed through unsecure channels such as email? Do you require a secondary verification (phone call, in person, or notification outside of email) of the change from the employee?

  • Require a voided check from the employee to confirm the new account details.

  • Alert your employees to report suspicious phishing emails/phone calls, and to report immediately if their paycheck is not direct deposited on their expected payday.

  • Have employees make their own banking changes through a secure employee log in on your 3rd party payroll provider’s platform (bonus, this can also allow them to retrieve their own paystubs and W-2’s).


Helpful Links:

https://www.cnbc.com/2019/04/09/new-wire-fraud-scam-targets-your-direct-deposit-info-paycheck.html



https://www.lexology.com/library/detail.aspx?g=75685deb-06fc-4e47-a696-44843104f866

https://www.checkmatepayroll.com/payroll-fraud-alert-direct-deposit-scam/


Scammers are also targeting your Accounts Payable team with fraudulent vendor invoices, which are similarly designed to look like authentic, internal requests. No one is immune!

https://www.techradar.com/news/shark-tank-host-falls-victim-to-phishing-scam

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