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“So, This Happened …” – A True Payment Fraud and Bank Account Verification Story

When should a company pay attention to a back-office request for support to automate vendor onboarding, including automatic bank account verification? At least one company found out the hard way.

The senior management of a company recently called its accounts payable team into a meeting. AP had just made a six-figure vendor payment to the wrong bank account. Criminals got the money, not the vendor.

Senior management grilled the AP manager, wanting to know what went wrong and how it could have happened. It was a proper raking over the coals.
This really happened. When the AP manager got to speak, she could only explain their manual process for vendor onboarding and bank account information verification, which is fraught with risk.

The Complexity of Vendor Onboarding

In a large organization, people not involved in accounts payable often don’t understand how complicated vendor onboarding is. Bringing vendors on board and addressing all the touches of that vendor information is complex. Vendor onboarding is subject to risk at every level, and with sophisticated cybercriminals, the risk factors are accelerating.

Manual onboarding is costly and inefficient, but that’s just the tip of the iceberg for many organizations. Poor vendor data management can result in significant fines and penalties, especially if you pay a supplier on a sanctions list. There’s also the issue of compliance, the risk of fraud, the embarrassment of public disclosures and strained supplier relationships.

Bank account verification is often a time-consuming and laborious process. Manual approaches are laborious and time-intensive, and verification of some vendors can easily slip through the cracks. Phone and email “tag” with vendors and banks is replete with delay while payments come due.

Onboarding and Bank Account Verification Help

When organizations rely on manual approaches, verification of vendor bank account change requests is too likely to slip through the cracks. Automating vendor onboarding with a bank account verification component can help.

By automating vendor bank account verification, businesses can establish a reliable system that validates the authenticity of bank account information. This verification process typically involves cross-referencing the details provided by vendors with banking databases and flagging discrepancies requiring additional research. The automated process brings efficiency and helps ensure that a vendor account is active and belongs to the intended recipient, thus avoiding the situation above.


The AP manager told the executives in our story, “We recommended a project last year to implement a vendor portal with automated vendor onboarding—including bank account verification. It would help to prevent this sort of thing from happening.” Unfortunately, the decision at the time was not to move forward. “Shall we re-engage?” she asked, to which the execs replied in the affirmative.

This fraud might not have happened had they decided to move forward with AP’s recommendation to implement a vendor portal with automated validations of tax ID numbers, OFAC checking and—critically—bank account verification. The additional centralized, automated support would make BAV easier and more timely, therefore less likely to slip through the cracks. The solution is not very expensive, nor is it a resource-intensive application.

Inefficient and ineffective supplier onboarding and vendor information management processes can take a toll on a business. That’s why more organizations are deploying self-service supplier portals, web-based solutions that automate documents and data collection from new and existing suppliers. A good vendor portal and onboarding system validates vital data points against databases, verifies vendor TINs and conducts sanctions screening and bank account ownership. They provide visibility to both you and your suppliers across the process.

That Was Easy

Deploying a vendor portal today is much easier and less expensive than in the past. You can have a solution up and running in a matter of weeks. A vendor portal with automated vendor onboarding is not a budget breaker. It significantly impacts an organization, supporting all the validations and verifications you need—including vendor bank account ownership verification—and bringing order and consistency across the entire organization.

People delay making decisions for various reasons. Fraud happens, and hindsight is 20/20. Subsequently, the manager got back in touch with the vendor onboarding solution provider, whom she had already recommended the year before but had yet to move forward with when senior management said no. Better late than never.

To learn how VendorInfo can help you prevent fraud, contact us.

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