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Fraud incidents vary significantly in scale and impact, so the response should reflect the level of risk involved. A low-value isolated transaction may be handled through established operational processes, while a larger incident, a pattern of related transactions or an event with wider financial, regulatory or customer implications may require formal escalation.
Where an incident exceeds the organisation’s agreed fraud loss tolerance or meets the threshold for activating its fraud response plan, there may be uncertainty about how the fraud occurred, whether additional transactions are at risk and who needs to be involved in the response.
Acting quickly may help limit further losses, preserve opportunities for recovery and prevent criminals from continuing to exploit compromised accounts or systems. A structured incident response run book can help organisations coordinate that response by setting out what needs to happen, who is responsible and how actions should be prioritised.
By the end of the first hour, the response team should have: confirmed the suspect payments and recorded the time of discovery; notified the bank or payment provider and requested recall or recovery; contained compromised accounts, devices and payment channels; preserved relevant transaction information, communications and evidence; identified the incident lead and decision-makers; assessed the exposed accounts or parties; introduced temporary and proportionate controls on related activities; and recorded key decisions, owners and next review times.
The actions taken during the first hour of a fraud incident can significantly influence the eventual financial and operational impact.
Criminals may attempt to move stolen funds rapidly, while compromised accounts, credentials or communication channels could be used to authorise further transactions. Delays in identifying the extent of the compromise or escalating concerns can increase the organisation’s exposure.
A documented incident response run book helps businesses act quickly without relying on decisions made under pressure. It should establish clear responsibilities, escalation procedures and actions for containing an incident, assessing its impact and preventing further losses.
The following three stages provide a practical framework for organising the initial response. The timings are indicative, and urgent actions, particularly payment recovery and containment, should take place as soon as the relevant risk is identified rather than waiting for a particular stage.
The immediate priority is to establish that a fraudulent payment has occurred, activate the appropriate response procedures and prevent the situation from escalating.
Once the incident has been validated, the organisation should activate its fraud incident response arrangements and bring together the relevant specialists. This will typically involve the fraud lead, cyber security and IT teams, supported by a designated incident coordinator who can oversee the response and ensure that actions are recorded.
Contacting the organisation’s bank or payment provider should be an immediate priority. Where funds have already been transferred, a payment recall or recovery request should be initiated without delay. The receiving institution may be able to take action to trace or secure funds, although recovery is not guaranteed and becomes more difficult as money moves between accounts.
At the same time, businesses need to contain the wider threat. If an account or device has been compromised, this may involve terminating suspicious sessions, blocking access from identified devices or IP addresses, resetting credentials and temporarily suspending high-risk payment activity. Where complete blocking would cause significant operational disruption, temporary restrictions or additional verification requirements may provide a more proportionate response.
These decisions should be informed by the nature of the incident and the potential consequences of intervention. In some circumstances, immediate blocking may alert the suspected fraudster or compromise an ongoing investigation, so containment measures should be coordinated carefully.
Preserving evidence is also important from the outset. Transaction records, emails, communications, access logs and other relevant information should be secured before changes to accounts or systems result in potentially valuable evidence being lost.
Once the immediate threat is being contained, attention should turn to understanding how the fraud occurred and identifying the full extent of the organisation’s exposure.
The response team should establish where the compromise originated and which accounts, systems, communication channels or business processes may have been affected. This may involve examining whether an external party was compromised, whether account credentials were stolen or whether a fraudulent instruction was introduced through an otherwise legitimate communication channel.
Understanding the attack method is particularly important as fraud techniques become more sophisticated. AI-enabled social engineering may involve convincing voice or video impersonations, highly personalised messages or fraudulent documentation. Other incidents may originate from automated credential attacks, compromised third-party tools or weaknesses in customer-facing systems.
Investigators should also establish the potential financial impact, identifying confirmed losses, suspicious transactions and any payments that may still be recoverable. Where the incident affects multiple accounts or operational processes, resources should be prioritised according to the potential level of harm.
Particular attention may be required for high-value transactions, vulnerable customers, critical internal users or business relationships that present additional risk. Identifying these exposures early allows organisations to prioritise further containment, recovery activity and investigation, even where the full circumstances of the incident have not yet been established.
As the immediate response progresses, organisations should introduce additional safeguards to reduce the likelihood of further fraudulent activity.
This may involve strengthening authentication requirements, resetting affected credentials or introducing additional verification for higher-risk transactions. Temporary restrictions can also be applied to activity involving new devices, recently added payees or unusual payment values, while enhanced monitoring helps identify suspicious patterns associated with the original incident.
These measures should reflect what investigators have learned about the likely attack method. Where a compromised account has been used to submit fraudulent payment instructions, for example, additional checks may be needed across related accounts or payment processes to establish whether similar attempts have occurred.
During this stage, the response should also involve the appropriate internal stakeholders. Senior management should receive timely updates in line with the organisation’s risk appetite and escalation thresholds, while legal, compliance, communications and anti-money laundering teams may need to assess their responsibilities. HR may also need to be involved where insider fraud is suspected.
By the end of the first hour, the organisation should aim to have established control of the immediate situation, identified the main areas of exposure and implemented safeguards against further losses. Investigations and recovery efforts will often continue well beyond this point, but a coordinated initial response provides a stronger foundation for the work that follows.
Although evidence preservation and financial recovery should begin immediately, both require continued attention as the investigation develops.
Organisations should maintain accurate records of the incident, including relevant communications, transaction histories, system logs, device information and the decisions taken throughout the response. Where AI-enabled fraud is suspected, evidence may also include synthetic communications, generated content or relevant outputs from automated detection systems.
Records should be preserved in a way that maintains their integrity and supports any subsequent forensic investigation, insurance claim, legal proceedings or regulatory review. Establishing a clear record of who collected evidence, how it was handled and when decisions were made can be particularly important if the incident is later scrutinised.
Financial recovery efforts should continue in coordination with banking partners and payment providers. Businesses also need to account for the wider financial consequences of the incident, including investigation costs, operational disruption and potential impacts on affected customers or suppliers.
Fraud incidents can involve multiple internal teams and external parties, making clear and coordinated communication essential.
Businesses should establish who is responsible for providing updates to senior management, employees, customers, suppliers and other affected stakeholders. Communications need to be accurate and proportionate to the information available, particularly while the investigation is ongoing and the full extent of the incident remains uncertain.
Where third parties have been affected, contact should be made through trusted, independently verified channels. Depending on the circumstances, organisations may need to re-verify identities, replace compromised credentials or account details and apply enhanced monitoring before normal activity resumes.
Legal and compliance teams should also assess whether the incident triggers reporting obligations to regulators, law enforcement, insurers or other authorities. The requirements and deadlines will depend on the nature of the fraud, the information compromised and the regulatory framework applicable to the business.
Care is needed to avoid disclosing sensitive investigative information or inadvertently alerting suspected fraudsters. A coordinated communications approach helps protect the integrity of the investigation while ensuring that relevant stakeholders receive appropriate information.
Once the immediate threat has been contained and recovery activity is under way, the organisation should undertake a structured review to establish how the fraud occurred and why existing controls failed to prevent it.
A root-cause analysis should consider whether weaknesses arose from operational procedures, technology, data quality, staff training, governance or automated detection systems. It should also examine whether AI-enabled techniques contributed to the incident and whether existing response plans adequately addressed those risks.
The findings should lead to clearly defined corrective actions, with ownership assigned and progress tracked through to completion. This may involve adjusting transaction thresholds, refining monitoring rules, updating negative listings, improving verification processes or strengthening incident response procedures.
Where fraud detection models are used, validated information from the investigation may also help improve their ability to identify similar threats in future, subject to appropriate data governance and model validation.
Importantly, lessons learned should become part of normal business operations rather than remaining within a post-incident report. Regular reviews and updates to response procedures help ensure that the organisation is better prepared when the next threat emerges.
At AJC, we help organisations prepare for, manage and recover from fraud incidents, providing practical support to minimise losses and strengthen their resilience against future threats.
Our Fraud Risk Consultancy team supports businesses with incident response planning, escalation procedures, fraud risk assessments, governance frameworks and remediation activity. We work with organisations to identify vulnerabilities, assess weaknesses in existing controls and establish clear, proportionate procedures for responding to fraud.
We can also support organisations during major fraud incidents, helping them coordinate their response, investigate control failures and identify opportunities to reduce further exposure. Our experience across fraud risk management and cyber security enables us to consider both the immediate impact of an incident and the wider weaknesses that may have contributed to it.
Through scenario-based desktop exercises, including AI-enabled fraud scenarios, we also help organisations test their response arrangements before a real incident occurs. This provides an opportunity to identify gaps in decision-making, communication and escalation, ensuring that teams are better prepared to act when time is critical.
The first 60 minutes after discovering a fraudulent payment can make a significant difference to the scale and impact of an incident.
Acting quickly to contain the threat, engage banking partners and understand the organisation’s exposure is essential. However, speed alone is not enough. Businesses also need clear responsibilities, coordinated decision-making and established procedures that allow them to respond effectively under pressure.
An incident response run book provides the structure needed to manage those critical first steps, while ongoing investigation, recovery and root-cause analysis help address the wider consequences.
Ultimately, effective fraud incident management is about more than responding to an individual payment loss. It is about limiting harm, restoring control and ensuring that the organisation emerges better equipped to respond to future threats.
Contact AJC on 020 7101 4861 or email info@ajollyconsulting.co.uk to discuss how we can help strengthen your fraud incident response and prepare your organisation to act quickly and proportionately when a significant incident occurs.
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