At a Glance

  • Fraud prevention experts say U.S. President Donald Trump's rapidly shifting tariff decisions have set the stage for global supply chain disruptions that could lead to an increase in supplier fraud incidents.
  • Experts told CFO Dive that the current environment may provide opportunities for fraudsters, as companies rush to mitigate the potential risks of Trump's tariffs, and their supply chains and relationships with third-party suppliers are undergoing turmoil.
  • "Fraudsters may exploit the fact that many companies lack proper processes when working with new suppliers, especially regarding bank account and payment processing," said Baptiste Collot, CEO of fraud prevention company Trustpair, in an interview.

Deep Dive

According to a report released by Trustpair in February, nine out of ten U.S. companies were attacked by cyber fraud activities last year, a 14% increase from 2023 levels. The report said this surge is mainly attributed to fraudsters rapidly adopting artificial intelligence technology, making it easier for them to generate highly realistic impersonation and social engineering attacks.

Such scams may include impersonating suppliers. Nearly 70% of surveyed companies experienced supplier fraud last year, compared to 47% a year earlier.

The research also found that the problem is expected to worsen as fraudsters continue to leverage advanced technology and exploit avenues such as supply chain disruptions. A quarter of respondents said changes in supply chains or third-party relationships were most likely to expose their organizations to a higher risk of payment fraud this year.

According to Lee-Ann Perkins, a treasury management professional involved in the study, the risk has escalated significantly in the months since Trustpair released its report, as the Trump administration's trade and tariff policies have left businesses in shock and desperation.

"We expected to see changes like tariffs after the new president took office, but it all happened so fast, almost overnight," she said in an interview, adding that tariff-induced supply chain disruptions are creating "fertile soil" for supplier fraud.

She noted that companies are rushing to "procure as many products as possible before any tariffs take effect and quickly onboard new suppliers." "Essentially, companies are desperately trying to avoid the financial impact of tariffs, but teams are not focused on who they are paying. This is a less obvious but increasingly dangerous side effect of all global trade disruptions and economic uncertainty," she said.

Perkins added that the situation is reminiscent of the COVID-19 pandemic, when companies faced "very urgent supplier sourcing and payment pressures."

Trustpair's research found that the financial losses caused by payment fraud to businesses are increasing. Nearly 60% of respondents said the financial impact of payment fraud exceeded $5 million in 2024, compared to only a quarter the previous year, a surge of more than threefold.

The report noted that steps such as automated supplier verification processes and bank account verification are crucial.

"It is not always a top priority for CFOs or other leaders in an organization, but operational urgency and weak controls are certainly a breeding ground for fraud, and they intensify during difficult times," Perkins said.