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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesPayment fraud is easier to prevent when you check the request before money moves, protect account access, and monitor what happens afterward. For consumers, the key warning signs are pressure, impersonation, requests for sensitive information, and demands for hard-to-recover payment methods. For businesses and financial organizations, controls also need to cover invoice approvals, account activity, and merchant verification.
What payment fraud looks like
Payment fraud is not one scheme with one warning sign. It can involve a scammer persuading someone to send money, an attacker taking over an account, a fraudulent change to payment instructions, or a merchant whose identity or business practices have not been adequately checked. The people involved—and the controls that can help—differ by situation.
- Consumer scams: A fraudster impersonates a trusted person or organization and persuades someone to send money or reveal personal information.
- Business email compromise (BEC): A criminal uses or imitates an email account to send false payment instructions, such as a changed bank account for an invoice.
- Unauthorized account access: Someone gets into an account and may change details or initiate transactions.
- Merchant and processor risk: A processor or financial organization faces risk when it does not adequately verify merchants and their business practices.
These situations can overlap, but a control that protects a login does not by itself verify an invoice or establish whether a merchant is legitimate.
How consumers can recognize suspicious payment requests
The Consumer Financial Protection Bureau (CFPB) identifies several warning signs that can appear by phone, text, mail, email, or online:
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- A request for money or personal information that you did not expect.
- Pressure to act immediately, keep the request secret, or avoid checking with someone else.
- Someone claiming to be a trusted person, government agency, law-enforcement officer, bank, or card provider when you cannot independently confirm the identity.
- A demand to pay an upfront fee or tax to receive a prize.
- Instructions to pay by wire transfer, cryptocurrency, payment app, prepaid card, or gift card.
These methods are not proof of fraud in every circumstance, but an unexpected request to use one—especially with urgency or secrecy—deserves independent verification. Do not rely on caller ID or the sender name or address shown in a message as proof of identity. Contact the person or institution using contact details you already trust, not details supplied in the suspicious request.
What to check before a payment is sent
For an individual paying a bill or sending money
- Pause if the request is unexpected, urgent, or different from the usual arrangement.
- Use a known phone number, official app, or previously verified contact method to confirm the request. Do not reply to the suspicious message or use its phone number to verify it.
- Check the recipient, amount, and payment method before authorizing the transaction. If the recipient asks you to change methods or account details, verify that change separately.
- If you cannot verify the request, do not send the money or disclose personal information. Contact your bank or the relevant institution through its trusted contact details for guidance.
For a business handling invoices or payment changes
- Set written payment approval procedures, including who may approve invoices and changes to payee or bank details.
- Review invoices and payment instructions for unexpected changes, unusual amounts, or discrepancies with established records.
- Verify new or changed instructions through a separate, trusted channel—for example, call a previously known number rather than a number included in the email requesting the change.
- Use more than one verification method or contact another authorized participant when instructions appear suspicious. FinCEN advises financial institutions to use multi-faceted verification for suspicious emailed instructions and notes that BEC and email account compromise (EAC) payments are often irrevocable.
- Train staff to pause and escalate unusual requests instead of treating an apparent sender address or urgent message as authorization.
Email filtering can be one part of security, but it does not replace approval controls and independent confirmation of payment instructions.
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How to protect account access
Financial organizations and businesses should use risk assessment and layered authentication rather than relying on a single login check for every situation. The Federal Financial Institutions Examination Council (FFIEC) has emphasized layered security and the weaknesses of single-factor authentication. For individuals, use the strongest available sign-in protections for financial accounts and follow the institution’s security guidance.
Multifactor authentication (MFA) requires more than one kind of evidence to sign in. An authenticator app or hardware token can be one factor. A FIDO2 security key is a possible hardware-token option, but it only helps where the account and service support that key and authentication standard. A security key protects account access; it is not a payment-fraud detector and cannot verify whether an invoice or transfer request is genuine.
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How organizations can detect suspicious activity
Monitor for departures from normal activity
Transaction and account monitoring can help identify activity that differs from established patterns, such as unusual transaction behavior or account changes. An alert is a reason to investigate, not proof of fraud. Organizations need a process to verify identity and assess the activity before deciding what action is appropriate.
Use proportionate responses
The Federal Trade Commission’s (FTC) Red Flags Rule guidance describes measures that covered entities may use, including identity checks, transaction monitoring, customer contact, access changes, and account closure. Which obligations apply depends on whether an organization is covered and on the circumstances; the rule does not impose identical requirements on every business.
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Verify merchants at onboarding and over time
FFIEC warns that payment processors face heightened fraud and money-laundering risk when they lack effective ways to verify merchant identities and business practices. Its guidance points to adequate policies and risk assessment. Where relevant, diligence should account for underlying merchants as well as the direct customer, with the level of scrutiny suited to the risk.
How to compare fraud-prevention controls
Organizations assessing controls or software should compare the job each option is meant to do rather than treating all fraud tools as interchangeable. Useful questions include:
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- Threat covered: Is it intended to address account takeover, authorized payment scams, card-not-present abuse, BEC, merchant fraud, or another risk?
- Workflow point: Does it operate during merchant onboarding, login, payment authorization, settlement, or post-transaction review?
- Evidence used: What identity, account, transaction, or other signals inform a decision, and can staff understand why an alert was raised?
- Operational impact: How will the organization handle false declines, manual reviews, and alert workload?
- Integration: Will it work with existing payment, authentication, and case-management systems?
- Safeguards and obligations: What privacy, security, and regulatory requirements apply to the data and decisions involved?
- Response and recovery: What support is available for investigation, customer contact, and action after a suspected incident?
Official guidance identifies control needs, but it does not establish that a particular product is suitable for a given organization. Selection requires assessing the organization’s own risks, systems, and obligations.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What to do if you suspect payment fraud
- Contact the relevant bank or financial institution promptly. Use a phone number or contact route from a trusted source, such as the back of a card or the institution’s official materials, rather than a number supplied by an unsolicited caller or message.
- Follow the institution’s instructions. Depending on the suspected fraud, it may advise steps such as securing access, changing credentials, reviewing transactions, or taking other account-specific action.
- Preserve records. Keep messages, transaction details, receipts, and other relevant information so you can explain what happened to the institution or reporting agency.
- Report the incident through an appropriate channel. In the United States, consumers can report scams to the FTC; suspected internet-enabled crime can also be reported to the FBI’s Internet Crime Complaint Center (IC3).
- Be cautious of follow-up contacts. The CFPB warns against trusting unsolicited contacts claiming to be from government, law enforcement, a bank, or a card provider. Verify any such contact independently before sharing information or moving money.
What enforcement cases say about processor risk
FTC announcements in 2026 illustrate allegations involving payment processors; they are case-specific outcomes, not estimates of industrywide fraud or losses.
| Case | What the FTC announced |
|---|---|
| Nuvei (2026) | The FTC announced that Nuvei would pay $4.85 million and implement robust merchant screening to settle charges alleging it facilitated merchant fraud. The FTC said its complaint alleged more than $30 million in consumer payments for Reimage from 2017 to 2023. |
| Humboldt Merchant Services (2026) | The FTC announced that Humboldt Merchant Services would pay $12 million and be permanently banned from processing for merchants with heightened potential fraud risk to settle allegations. The FTC complaint alleged that it processed payments for more than 1,000 shell merchants. |
These announcements underscore why merchant identity checks and risk-based due diligence matter to processors; they do not show that any particular screening procedure will prevent every fraudulent transaction.
Scope of this guidance
This article gives broad U.S.-oriented guidance, not a legal or compliance determination. The Red Flags Rule applies to covered entities, and specific obligations depend on status and circumstances. FFIEC guidance is directed to financial institutions and the processor-risk context it describes. Organizations implementing controls should confirm current requirements with the relevant regulator, payment network, financial institution, and qualified counsel.
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