What is business credit card fraud and how can you prevent it?

A 2023 survey found that 62% of corporate cardholders knew company credit cards were misused for non-business activities within their organization, while 18% reported this as “commonplace.” Understanding where vulnerabilities exist is the first step toward closing them.

The most common risk factors for business credit card fraud include:

• Business email compromise (BEC): Fraudsters impersonate executives or trusted vendors to manipulate employees into authorizing fraudulent transactions. The median BEC transaction reaches $50,000 USD, according to the Verizon 2024 report.
• Internal fraud through expense manipulation: Expense reimbursement fraud lasts an average of 18 months before detection and appeared in 13% of fraud cases examined by the ACFE in their 2024 study. These schemes involve falsified receipts, inflated expenses, and personal costs claimed as business purchases.
• Account takeover (ATO) attacks: These attacks resulted in $15.6 billion USD in U.S. losses in 2024, up from $12.7 billion USD in 2023, according to a 2025 identify fraud study by Javelin Strategy. Once fraudsters control legitimate credentials, they operate within normal business processes, making detection significantly harder.
• Inadequate internal controls: Lack of separation of duties and weak design controls are among the top five issues driving material weaknesses in internal controls, according to KPMG's 2024 study.
• Card-not-present (CNP) vulnerabilities: These transactions eliminate security controls provided by physical card possession. This risk has become greater with the rise of remote work.

With this knowledge, you can prioritize your fraud prevention efforts and implement targeted controls where your business is most vulnerable.

Finance teams face the challenge of balancing security controls with operational efficiency. Prevention requires layered controls that address technology, policy, and human factors simultaneously.

Implement real-time transaction monitoring

Modern spend management software offers built-in real-time alerts at no additional cost. Configure alerts for transactions above role-based thresholds, purchases in unexpected geographic locations, multiple transactions in short timeframes, and activity outside normal business hours.

Brex, a modern corporate financial services platform, combines spend management with machine learning fraud detection that learns normal spending patterns over time, flagging deviations that static rules would miss and alerting finance teams before losses compound.

Establish role-based spending limits

Business credit card limits should align with actual business needs rather than arbitrary caps. The most effective tactic is to structure limits by employee role with tiered spending thresholds.

Monthly aggregate caps provide an additional layer of protection. Should unauthorized activity occur, losses are contained to the approval threshold rather than permitting unlimited card access.

Require documentation within 48 hours

Requiring receipts within 48 hours creates accountability by establishing a clear documentation trail while expenses remain fresh in cardholders' minds. Fraudsters cannot easily fabricate documentation after the fact when immediate submission is required. The documentation requirement should apply to all transactions with no minimum threshold exemptions.

Train employees on fraud recognition

Employees are simultaneously your first line of defense and your greatest vulnerability. An effective training covers policy requirements, phishing recognition, password security, and reporting procedures. Conduct quarterly 15- to 30-minute refresher sessions to keep awareness current.

Deploy virtual cards for vendor payments

Virtual corporate cards create unique card numbers for specific vendors or single transactions. These cards can include merchant-specific restrictions, spending limits, and expiration dates for single-use transactions that automatically invalidate after use.

The Jacksonville Jaguars case demonstrates why virtual cards require additional safeguards. Amit Patel, the team's financial manager, exploited his position managing the virtual credit card program to steal $22 million USD between 2019 and 2023. The fraud went undetected for four years because virtual cards alone proved insufficient without dual authorization controls and real-time monitoring.

When properly implemented with oversight mechanisms, virtual corporate cards significantly limit fraud exposure by containing potential breaches to individual vendor relationships rather than exposing the entire corporate credit card program.

Separate duties across multiple employees

The same person should never make purchases and approve their own expenses. For small finance teams, minimum viable segregation means the cardholder initiates transactions and submits documentation, the direct manager reviews business purpose and approves expenses, and a finance team member reconciles statements and verifies policy compliance.

The Santa Cruz County case shows the catastrophic consequences of ignoring this principle. Elizabeth Gutfahr, the county treasurer, embezzled $38.7 million USD over 11 years by exploiting a fundamental control failure: she had authority to both initiate and approve transactions with no independent oversight. The fraud was finally detected not by internal controls but when the county's banking institution flagged suspicious account activity.

This case is an example of why separation of duties is non-negotiable regardless of an employee's tenure or perceived trustworthiness.

Written policies without consistent enforcement become ineffective suggestions that fraudsters exploit. Control architecture is as important as policy language itself, according to the ACFE.

Define approved and prohibited categories explicitly

Ambiguity creates opportunities for both intentional fraud and unintentional misuse. A corporate credit card policy must include restriction to official business purposes, prohibition of cash advances, mandatory receipt submission, explicit unauthorized purchase categories, and defined disciplinary actions.

Prohibited categories should explicitly list personal purchases of any nature, ATM cash withdrawals, gift cards or prepaid cards for non-business purposes, expenses for family members, and purchases from employee-owned businesses.

Require signed cardholder agreements

Every employee receiving a corporate card must sign a written acknowledgement before activation confirming they understand the card is company property, accept personal liability for policy violations, and commit to immediate reporting of lost or stolen cards. This creates legal protection and prevents claims of ignorance.

Establish pre-approval requirements for high-risk categories

Travel and entertainment expenses, professional services engagements, equipment purchases, and transactions exceeding predetermined thresholds warrant additional scrutiny and documented pre-approval before purchase authorization. Companies should set specific thresholds, such as requiring pre-approval for any single transaction over $500 USD or any monthly spend exceeding $2,500 USD.

This control catches potentially fraudulent requests before money leaves the organization.

Specify progressive consequences for violations

Policies must articulate clear consequences applied consistently across all organizational levels, including executive-level cardholders. Leadership must follow through consistently with these consequences.

Mandate monthly reconciliation by independent reviewers

Controllers should reconcile credit card statements monthly against original receipts, with verification performed by someone who did not initiate or approve the transactions.

Additionally, finance leaders should prioritize technology solutions that integrate with ERP systems and provide real-time transaction monitoring.

Finance teams should monitor for specific red flags that signal potential fraud in progress. Common warning signs include:

• Charges outside business hours: Transactions occurring at times when employees don't typically work may indicate compromised card credentials being used by unauthorized parties.
• Purchases in unexpected locations: Charges in cities or countries where the company doesn't operate and employees aren't traveling suggest card data has been stolen and is being used elsewhere.
• Unrecognized merchants: Transactions at vendors your company has never used before, especially in categories unrelated to your business, may indicate fraudulent activity.
• Sudden spending spikes: Increases of 50% or more without business justification often signal unauthorized activity, particularly when the cardholder can't provide documentation for the spike.
• Small test transactions: Multiple purchases under $10 followed by a large charge indicate fraudsters testing stolen card data before attempting a significant theft.
• Unusual transaction frequency: Multiple charges at the same merchant within minutes or hours, especially if the cardholder doesn't typically make repeat purchases, may suggest card compromise.
• Category misalignment: Charges at jewelry stores, vacation rental platforms, or personal care services when these don't relate to your business purpose signal potential personal use or fraud.
• Round-dollar amounts: Transactions for exactly $100, $500, or $1,000 often represent estimates rather than actual purchases and may indicate fabricated expenses or gift card purchases that can be easily converted to cash.
• Missing or vague documentation: Receipts that never arrive or generic descriptions like "office supplies" create audit vulnerabilities and may deliberately mask fraudulent purchases.
• Duplicate transactions: The same charge appearing multiple times on the same day or within a short timeframe may indicate either card skimming or intentional double-billing schemes.
• Resistance to controls: Employees who consistently avoid audits, push back against documentation requirements, or resist transparency measures may be attempting to conceal fraudulent activity.

These warning signs serve as a starting point, but effective fraud detection requires understanding your company's normal spending patterns. Establish baseline behaviors for your industry, company size, and operational model, then configure your monitoring systems to flag deviations from those norms.

Fraud prevention works best when it's automated rather than manual. The companies that successfully prevent credit card fraud don't rely on monthly statement reviews and after-the-fact reconciliation. Instead, they build controls directly into their spending infrastructure so fraud attempts are blocked before they become losses.

Brex combines corporate cards, business banking, and expense management software with built-in fraud prevention:

• Real-time fraud detection: Machine learning monitors transaction patterns and flags anomalies instantly, not weeks later during statement review.
• Granular spending controls: Set limits by employee, department, merchant category, or individual vendor with automatic enforcement at point of purchase.
• Virtual cards with merchant locks: Generate unique card numbers for each vendor relationship, eliminating cross-contamination if credentials are compromised.
• Automated receipt capture: AI-generated receipts and transaction memos close documentation gaps that fraudsters exploit.
• Native ERP integration: Automatic sync with QuickBooks, NetSuite, and Xero creates audit trails without manual data entry.

The platform's unified approach means fraud prevention controls, spending policies, and accounting workflows operate together rather than requiring manual coordination. Controls prevent most fraud attempts before they succeed, reducing time spent chasing receipts and investigating suspicious charges.

Sports Basement, a multi-location sporting goods retailer, implemented vendor-specific virtual cards as part of their fraud prevention strategy. "Having different virtual cards per vendor means if a card is compromised, we don't need to replace cards with every vendor," explains Will Hollingsworth, Corporate Controller at Sports Basement. The company achieved 99% expense compliance within three months after implementing Brex's automated controls.

Schedule a demo to see how Brex can help you prevent fraud while streamlining financial operations.

How quickly should companies respond to suspected credit card fraud?

Contact your card issuer immediately to request card cancellation or freeze. Within 24 hours, notify law enforcement, begin formal investigation, and alert card networks if data compromise is suspected.

Can small finance teams implement effective fraud prevention?

Scaling companies with limited resources can achieve strong fraud prevention by using existing banking platform capabilities, establishing clear policies with genuine enforcement, creating appropriate separation of duties, and maintaining proactive monitoring through exception-based review.

What technology features matter most for fraud prevention?

Prioritize machine learning fraud detection, virtual card generation with merchant-specific controls, and PCI DSS Level 1 compliance certification. Some modern corporate finance platforms combine these features with native ERP integration, eliminating manual reconciliation while maintaining audit trails.

How often should companies audit corporate card programs?

Conduct structured monthly reviews focusing on pattern recognition and anomaly detection. Perform annual reviews of high-spend cardholders. Review transactions for red flags including purchases at unusual times or locations and transactions at merchants inconsistent with business purpose.

What role does employee culture play in fraud prevention?

Creating a culture of accountability starts with executive leadership demonstrating zero tolerance for policy violations at all levels. Companies should establish anonymous reporting mechanisms that allow employees to report concerns without fear of retaliation. Consistent enforcement matters more than policy language. Executives held to the same standards as entry-level employees signal that fraud prevention is a genuine priority rather than a compliance checkbox.