Fraudsters are certainly not only targeting the world of big fast money. They can also cause widespread damage in ‘simple’ salary payments. Here, employees have a responsibility to double-check account information and that can be cumbersome. But, there is a solution to that.

Why should employers take immediate action to combat salary fraud and errors?

Fraudsters are certainly not only targeting the world of big fast money. They can also cause widespread damage in ‘simple’ salary payments. Here, employees have a responsibility to double-check account information and that can be cumbersome. But, there is a solution to that.
Why should employers take immediate action to combat salary fraud and errors?

When you pay salary to your employee, it is only allowed if the employee has a bank account. The Labour Market Fraud (Bogus Schemes) Act prescribes this, because this way it can be checked that employers pay at least the minimum wage.

As an employer, you are therefore obliged to check that your employee has their own bank account. If employees do not have a bank account, do not want to provide details or have the money transferred to an account that is not (also) in their name, this can lead to large fines for employers.

To avoid these fines, employers do their best to check beforehand that the transmitted account actually exists. And that all the details are correct. As an additional check, a copy of a bank statement is therefore regularly requested.

Checking the bank account may seem like a cumbersome procedure, but it is definitely necessary. Not only because of legislation, but also to avoid costs due to errors or fraud:

➔ Errors (at onboarding)
Checking the bank account at the first salary payment is very important. Entering a wrong figure at onboarding by the new employee or payroll, can also mean that money ends up in the wrong account. With all its consequences, because in practice it is not always easy to reclaim wrongly deposited money, from the recipient.

➔ Salary fraud
Certainly in large organisations, the number of cases of salary fraud is increasing considerably. The idea behind it, as with many fraud methods, seems almost too simple for words. But perhaps that is precisely why it is so effective. Fraudsters do everything they can to fool payroll administrators so that the money ends up in their account (instead of the employee’s account).

What is salary fraud?

Although scenarios will vary in practice, the basic steps in salary fraud are usually as follows:
● The fraudster searches on LinkedIn, for example, who is in charge of payroll within a large organisation.
● Next, the fraudster can often also use LinkedIn to easily look up which employees work for an organisation.
● Now the fraudster creates e-mail addresses with the details of employees.
● From this fake email address, a change in account details is communicated to the payroll department.
● When payroll unsuspectingly makes the account change, the money is deposited into the fraudster’s account.

Especially in large organisations, this kind of fraud can take some time to be noticed. It causes damage to the company, but can also put employees directly in financial trouble.
How can you prevent salary fraud (also and especially with the IBAN-Name Check)?
Salary fraud seems particularly difficult to prevent when it happens in, for example, the voluminous payrolls of large staffing organisations or multinationals. It can take a lot of time to ‘manually’ check every account change by, for example, contacting an employee again by phone or in writing. Or by requesting another account statement or copy of the bank card. This ‘manual’ check is also more error-prone than an automated one.

➔ The IBAN-Name Check can immediately offer an efficient solution for checking account numbers. Because it checks fully automatically whether the account is in fact in the name of the employee concerned. This prevents errors and minimises the burden on your employees.

How can the IBAN-Name Check provide quick and easy solutions for your payroll?

At SurePay, we have been working for years to make payments even more secure. We do this by performing the IBAN-Name Check for you, including for companies. For private payments, the IBAN-Name Check (from SurePay) is already integrated into the payment system at all Dutch banks. For business payments, such as salaries, companies can also perform an IBAN-Name Check themselves. This can be done by integrating SurePay solutions with your accounting software, but also by performing IBAN-Name Checks (in batches) on our platform.

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