AI-Based Image Forensics for Check Fraud Detection
Check Deposit Fraud is up a whopping 385%
The resurgence of check fraud started in 2014/2015 with the emergence of the EMV Chips. With the increase security for credit and debit cards, fraudsters pivoted to a different payment channel -- Checks.
The last ABA Deposit Account Fraud Survey was published in 2020, based on 2018 data. The report notes that check fraud accounted for 47 percent or $1.3 billion of industry deposit account fraud losses. Now, according to data from Auriemma Roundtable, Check Deposit Fraud is up a whopping 385% in 2022 -- exceeding the industry belief that check fraud has increased 3-4X from pre-pandemic levels.
*Chart created by OrboGraph based on market research data used to estimated check fraud attempts.
Furthermore, the Financial Crimes Enforcement Network (FinCEN) reports that check fraud-related Suspicious Activity Reports (SARs) have seen a drastic upswing:
350k+
check fraud-related SARs reported in 2021
680k+
check fraud-related SARs reported in 2022
665k+
check fraud-related SARs reported in 2023
Other supporting data points:
305 mail carrier robberies and 25k+ reported mail thefts in first half of 2023. Stolen checks from these crimes are sold on the dark web and platforms like Telegram to commit check fraud and identity theft.
Dr. David Maimon, Director of the Evidence Based Cybersecurity Research Group at Georgia State University, reports over 9,000+ checks are listed for sale through just 80 channels being monitored by his team.
BlueVoyant, check fraud IM groups on the dark web have grown by 500% in the past year. These groups provide everything needed to commit check fraud including selling checks, washing, mule services, and drop accounts.
Image Forensic AI can reduce fraud attempts by 95% on targeted use cases.
In order to curb the increase in check fraud, financial institutions need to invest in the right technologies to detect counterfeits, forgeries, and alterations. The most effective method is to leverage the latest innovation known as image forensic AI. Based off the principles of forensic handwriting examination, the technology analyzes the images of checks to flag fraudulent checks before losses are taken. Analyzers include: Check Stock Validation (CSV-AI), Automated Signature Verification (ASV-AI), Writer Verification (WV-AI), and Alteration Detection (AD-AI).
