Baltimore’s $800K Fraud Incident: A Wake-Up Call for Smarter Account Validation

In early 2024, the City of Baltimore lost more than $800,000 in a vendor payment fraud scheme that exploited gaps in identity verification and banking authentication. The fraudster impersonated a legitimate vendor, submitted fake banking details, and successfully redirected two large payments—$803,384.44 and $721,236.60—to their own account.

How It Happened

• A fake supplier form was submitted using the name of a real vendor employee.
• A personal email address was used instead of the company’s official domain.
• Accounts Payable staff approved the changes without verifying identity—no policy required it.
• Fake voided checks and bank account change requests were submitted and approved.
• Payments were sent to the fraudster’s account via the organization’s payment system of record.

Despite new policies like requiring phone verification and a 48-hour delay for banking changes, the incident highlights a deeper issue: manual checks and time delays aren’t enough.

The Case for Smarter Authentication

This is where ValidiFI’s Account Validation solutions come in. We go beyond basic verification to deliver real-time authentication—confirming not just that an account is open and valid, but that it’s owned by the person or business claiming it.

In a recent data study, ValidiFI authenticated more accounts than the competition could even verify.
That means:

• More coverage
• Fewer blind spots
• Less fraud
• More opportunity
  
  

In a recent data study, ValidiFI authenticated more accounts than the competition could even verify.

What’s the Real Cost of Fraud?

For Baltimore, it was $800,000+ in just two transactions. For lenders and businesses, it could be thousands of missed approvals or high-risk disbursements slipping through the cracks.

ValidiFI offers:

• Maximum coverage for verification and authentication
• Credentialed bank solutions for high-value disbursements
• Flexible validation methods tailored to your risk tolerance

There’s no one-size-fits-all. But there is one platform built for it all.

ValidiFI Your Procurement and Accounts Payable Workflows

Whether you’re a government agency, financial institution, enterprise or service organization managing vendor and even consumer payments, it’s time to move beyond manual checks and basic validation that just meets Nacha compliance. It’s time to move from reactive fraud response to proactive fraud detection. Let’s connect.