Alert: Direct Deposit Scams are on the Rise

We’ve heard increased chatter in our peer groups that direct deposit fraud is on the rise

Here is the most recent scenario that has been catching employers and payroll companies: 

The company or payroll company will receive an email, allegedly from their employee requesting that their direct deposit account be changed. The form may or may not be on company/offical direct deposit form. Often, the new direct deposit account being requested is going to a pay card or far away bank. The most recent string of fraud specifically references American Express pay cards. The company sets up the new direct deposit and come pay day, funds are deposited to the newly requested account. However, it was never the actual employee who requested the change, and the funds have been sent to the fraudster – never to be seen again. 

How to Protect Yourself: 

  • Always verify that direct deposit changes have come directly from your employee if they do not request them in person. Request a voided check or letter from the bank to verify authenticity.

  • Ensure that your employees are using strong passwords for online employee self-service applications. Fraudsters have also been known to log in to employee self-service and request changes to direct deposit online. 

  • If the banking info looks suspicious, ask your employee about it. 

What Paper Trails is doing to avoid fraud:

  • We will only accept direct deposit change requests from our primary point of contact at your company, or specified designee. We will not accept change requests directly from an employee.

  • Our online employee self-service applications require strong passwords that are hard to crack. 

  • When a direct deposit change is made in online employee self-service, the employee will receive an email alert that their information has changed. If they themselves didn’t change it, that should be a red flag for them. 

  • Our team undergoes thorough information security & fraud prevention training, and is always on high alert for fraudulent activity. If we see something suspicious, we will alert you immediately. 

If you have questions on this or any other fraud prevention topics, please feel free to reach out to your payroll processor. The tricksters are getting better and better and this type of thing, so we all need to stay vigilent.