💡 Summary #
Protecting your business – and the capital we fund – is central to Factor & Fund’s mission.
We use a combination of document verification, payment control, and data security systems to detect and prevent fraud before it can affect any transaction.
This keeps funding fast, compliant, and risk-free for both parties.
⚙️ Our Fraud Prevention Framework #
1. Multi-Layer Verification #
Every invoice and funding request goes through multiple validation layers:
- Entity verification: We confirm your business registration, EIN, and legal standing.
- Buyer validation: We verify your customer’s existence, creditworthiness, and payment record.
- Invoice proof: Each invoice is matched with purchase orders, delivery receipts, or service confirmations.
🟦 No invoice is funded without verified completion and buyer confirmation.
2. Direct Fund Flow Control #
We maintain 100% payment control through the Notification of Assignment (NOA) process.
- Buyers pay Factor & Fund directly into a secured remittance account.
- Funds never pass through third parties or unknown accounts.
- Payments are reconciled daily, ensuring all money reaches the correct client.
This structure prevents diversion or double funding.
3. UCC Filings & Lien Checks #
Before funding, we run UCC searches to confirm that no other lender or factor holds a claim on your receivables.
We also file a UCC-1 statement to secure our position — protecting both you and Factor & Fund from duplicate or fraudulent financing.
4. Document Authenticity Review #
We use internal and third-party tools to flag:
- Altered or duplicated invoices
- Mismatched buyer data
- Inconsistent document metadata (dates, file origin, edits)
- Suspicious email domains or forged signatures
⚠️ Any inconsistencies pause funding until verified directly with the buyer.
5. Ongoing Monitoring #
Fraud prevention doesn’t end after approval.
We continuously track:
- Buyer payment timelines and patterns
- Returned or bounced payments
- Repeated disputes or reversals
- Abnormal volume spikes in invoice submissions
If anything looks unusual, we verify immediately before releasing funds.
6. Secure Communication & Data Handling #
- All document uploads are encrypted (SSL/TLS 256-bit).
- E-signatures go through verified, timestamped systems (e.g., DocuSign).
- Access to client files is restricted to authorized compliance staff only.
- Data retention follows California DFPI and federal privacy standards.
🧾 Example Fraud Risks We Prevent #
| Risk Type | Example | How It’s Prevented |
|---|---|---|
| Duplicate invoices | Same invoice sent to two funders | Cross-check via UCC & metadata |
| False buyers | Nonexistent or fake companies | Entity verification & NOA |
| Falsified delivery | No proof of service | Mandatory delivery/acceptance proof |
| Payment diversion | Buyer pays client instead of Factor | Direct NOA control |
✅ Your Role in Fraud Prevention #
- Submit only accurate, undisputed invoices.
- Keep buyer contact info current.
- Report any suspicious buyer activity immediately.
- Never accept or redirect payments outside the NOA instructions.
💡 Fraud prevention is a shared responsibility — transparency builds long-term funding trust.
❓ FAQ #
Do you perform background checks on every buyer?
Yes. Every buyer goes through verification before any invoice is funded.
What happens if a buyer pays the wrong account?
You’ll be asked to forward the funds immediately to Factor & Fund’s account for reconciliation.
Do you share fraud data with other institutions?
Only when required by law or in case of confirmed fraudulent activity.
