You can never be too careful when taking steps to protect your employees’ payroll funds. There are many scams that others use to attempt to reroute payroll funds to themselves, one of which is a prepaid debit card ploy.

When hackers use this tactic, they send an email to a payroll professional from what appears to be the employee’s actual email address, usually personal email, requesting that the direct deposit is changed to deposit funds onto a prepaid card. For the tactic to work, the payroll professional must change the direct deposit information in the system without verifying the change with the employee, which can result in losses to the employee or the organization.

Stay Ahead of the Hacker

• Verbally confirm all direct deposit changes sent from personal email accounts (i.e. Gmail, Hotmail, etc.), especially when a business email address is also available.
• Speak to employees face to face or by phone.
• When calling an employee, use a phone number you have on file, not a phone number listed in the email you received requesting the change.

Remember: Hackers and thieves can be internal employees, too.

Other Considerations

Using a prepaid card to receive a direct deposit is not a definite indication of fraud, as some individuals legitimately use them. However, direct deposit fraud often involves a prepaid card because it’s difficult to track the fraudulent activity. Once funds are deposited, fraudsters are waiting in the wings to drain the accounts quickly, which means the likelihood of recovery of any funds sent to fraudulent cards is very low.

Also, prepaid card companies typically do not have a phone number to reach a live representative, so any attempt at recovering funds is through email, and response time is usually slow.

Connect with a CBIZ Human Capital Management professional for more payroll tips!