Independent agents recommend the best solutions to protect their clients throughout life's unforeseen events. However, they sometimes fail to follow their own advice—particularly when it comes to protecting their agency against financial fraud.

It's vital for agents to protect their bank accounts against fraud because bad actors move quickly. Each day an agent waits, it increases the risk of operational disruptions and financial losses that cannot be recovered.

Criminals only need routing and account numbers to access an agency's accounts. They steal this information via business email compromise, malware that records keystrokes, stolen paper checks and other means.

Most agencies send or receive wire transfers and use automated clearing house (ACH) transactions for carrier payments, commissions, accounts payable and payroll. They also often use tools such as remote deposit capture and smartphone apps to deposit checks.

Often, criminals target their victims by using ACH, too. For example, an agency receives and sends money via ACH in transactions with carriers, vendors or clients. Fraudsters who have obtained the agency's account information then attempt a debit on the agency's account. Once the funds are successfully transferred from the agency's account, the transaction is no longer traceable and the fraudster has obtained the funds.

With the use of Positive Pay, a banking industry tech tool, agencies have the ability to combat fraud. This tool enables ACH transactions to be defined in the banking system by vendor, payment amounts and other parameters. Those that don't match are flagged for approval before payment is made.

Positive Pay is also important because old-school fraud techniques remain popular among criminals. For example, an agency mails a $15,000 check to a vendor to upgrade its management system. A criminal steals the check from the mail and uses a popular fraud technique called “check washing" that uses chemicals found in household cleaning products to erase the payee information. They then reuse the check, changing the payee to themselves.

Next, the criminal goes to their own bank to cash or deposit the check. Once the check clears, they withdraw the funds and close the account. In this scheme, the dollar amount, signature and check number do not change, making the fraudulent behavior difficult to detect since most people only verify check numbers and dollar amounts when reconciling bank statements.

Often the crime isn't noticed until the vendor notifies the agency they haven't been paid. At that point, it is too late to recover lost funds. Positive Pay can work with both electronic and paper check transactions and agency principals shouldn't hesitate to put such tools and procedures in place to fight bank fraud.

Start by understanding that criminals attack via email, phone calls, faxes or even letters in the mail. Don't assume it's only a cybersecurity problem. Train employees to recognize, question and verbally authenticate changes in payments and payment methods.

Patricia Smith is vice president and director of cash management services and business development officer at InsurBanc, a division of Connecticut Community Bank N.A.