Preventing Payments Fraud with a Multi-Defense Strategy

In our fast-paced digital world, payments fraud has become a ubiquitous component of everyday business operations. In fact, 79 percent of organizations have experienced fraud attempts, according to Truist’s 2025 AFP survey. It’s an unfortunate reality, and while it may seem like an insurmountable challenge, there are measures we can begin implementing now to better protect our institutions from fraud in the future.

Layered Payment Fraud Prevention

Fraud is defined as “any intentional act or omission designed to deceive others, resulting in the victim suffering a loss and/or the perpetrator achieving a gain,” according to the Committee of Sponsoring Organizations of the Treadway Commission (COSO). And over the years, as technology has progressed, payments fraud has been rapidly evolving. How can your credit union prevent fraud and stay ahead in this changing landscape? In this article, I’d like to discuss the importance of a layered payment fraud prevention strategy and how your organization can implement one.

The Benefits of a Layered Approach

With advancements in tech, fraudsters have found gaps in traditional fraud prevention methods that rely on a single tool or control. That’s because these methods don’t catch every threat. Bad actors are taking a multi-dimensional approach to coordinate a single scheme, as we’ve seen with social engineering attacks, account takeovers, impersonations and more.

A one-touch method doesn’t fully protect throughout the multiple steps in the lifecycle of a payment, including before, during and after. Once fraud occurs, recovery can be difficult, especially when dealing with instant payments.

In addition, in the aftermath of a fraudulent event, your institution’s valuable reputation can take a hit, and those damages can be extremely challenging to repair. COSO highlights that “even relatively small frauds can be devastating to an organization,” as they can result in a breakdown of trust within your organization and from key stakeholders like your members, shareholders and the general public.

That’s why it’s imperative for your institution to focus on layered payment fraud prevention rather than a single or one-time operational fix. A layered approach offers a more robust protection plan that combines people, processes and technology to create the best outcomes. With a layered approach, your organization has multiple chances to detect and disrupt fraud.

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The Core Layers of Protection

What are the key layers that make up an impenetrable protection strategy? There are several I’d like to explore:

• Risk Assessments – This important tool helps your organization determine where any security gaps or unwanted opportunities may exist and provides an opportunity to improve controls.
• Policies, Procedures and Controls – What are the processes your credit union currently has in place regarding fraud? Assess your policies to determine your current standing and look for areas of improvement.
• Verification Measures – Implementing steps like two-factor authentication and access controls such as MFA, biometrics, dual control and limits can also create another layer of defense.
• Transaction Monitoring/Behavioral Analytics – With this tool, you can more quickly and efficiently spot anomalies, suspicious activity through real-time monitoring to better prevent fraudulent activity.
• Education & Training – Finally, last but certainly not least, implement employee and member training so your team can quickly identify scams and fraud scenarios, handle investigations, respond to incidents and so on.

Putting Your Prevention Strategy into Practice

With all these core layers in mind, the next step is implementation. Here are a few points to review to set your organization’s multi-defense strategy in motion:

1. First, identify and make sure you are familiar with your processes, security and related risks.
2. As you research, be purposeful in how you choose each layer, so that your tools can work congruently to address any security gaps.
3. Provide extensive, ongoing training and education for your team, to be able to integrate fraud detection into your organization’s culture.
4. Finally, make sure to test and continuously refine the controls and processes.

Just like the rapidly changing risk landscape that credit unions navigate every day, we should be continuously cognizant of ways to prevent payments fraud. All in all, a successful multi-defense strategy is one that is constantly evolving.

Tarah Sweigart is the compliance and fraud risk administrator for Vizo Financial. Her role involves supporting the BSA and fraud risk efforts of the Corporate and providing payments risk education to credit unions.