Electronic payment fraud update | Nixon Peabody LLP

Electronic payment fraud is evolving at an alarming pace. During our recent presentation at Nixon Peabody’s 2025 Cybersecurity and Privacy Law Summit, we shared how traditional business email compromises have given way to sophisticated AI-powered deepfake attacks that are increasingly difficult to detect. According to a KPMG study, 71% of organizations have already been targeted, and FBI data shows that losses from these types of schemes now exceed $3 billion annually. Understanding these threats is critical for organizations.

This article highlights the key trends and prevention strategies we discussed. For the complete picture, we encourage you to watch our full electronic payment fraud session.

The evolving threat landscape

Funds Transfer Fraud (FTF) has become one of the most financially damaging cyber threats organizations face. The basic premise remains simple: threat actors impersonate executives, vendors, or banks to redirect legitimate payments into fraudulent accounts. What’s changed is the sophistication of these attacks.

From typos to deep fakes

Traditional business email compromise relied on spoofed email addresses and social engineering. In our presentation, we showed examples of obvious red flags—misspelled company names, awkward phrasing, mismatched fonts—that employees should catch with proper training.
But the game has changed. AI-generated deepfake videos now allow criminals to impersonate executives with stunning realism. We discussed cases where…

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What is the greatest online Fraud threat? In 2026 Impersonation Fraud fueled by Generative AI is the greatest online threat: Fraudsters use Deepfakes (cloned voices and hyper-realistic video) to mimic family, executives, or trusted brands. These high-fidelity deceptions bypass traditional “red flags” like poor grammar, making them nearly impossible to detect. By exploiting human trust and psychological pressure—often via “Business Email Compromise” (BEC) or urgent family distress calls—criminals manipulate victims into making irreversible cryptocurrency or wire transfers. In a world where you can no longer trust your eyes or ears, manual verification is your only true defense.