Check Fraud Prevention
With all of the excitement of Mobile RDC, the industry has yet to experience significant losses… at least those which have leaked to the public. Orbograph commends RemoteDepositCapture.com for initiating a study in this area to help identify and quantify the risk in Mobile RDC; at least anecdotally. Business-focused RDC solutions have been very beneficial for the banking industry. Not only has the value been there for businesses, but the losses have been minor across the industry.
Read MoreSo if you haven’t heard by now, Target, the big red retailer, has a bit of a fraud problem. Somehow, their payment system was hacked and stole a mere 40M credit and debit account numbers with expiration dates and CSV codes…maybe even PIN numbers. Hmmm. How can this be? Per a Krebs article, “Little is known yet about how the data was compromised. “My best guess is [Target] got hit by hackers who got into their network, and were able to push malicious software out to the point of sale systems,” says Krebs, who spoke to American Banker in a recent exclusive interview. “We probably won’t know for certain for weeks or months.”
Read MoreCheck fraud losses in the US were last benchmarked and estimated at $893M for financial institutions from a 2011 ABA Deposit Account Fraud Survey Report. However, one of the main considerations in overall losses which was not incorporated were retailer losses. No one knows the exact number, but we have spoken to several consultants who estimate it at 10X the losses of banks. This event occurs when a fraudster purchases goods from a retail location with a fraudulent check and then departs with the product/goods. If the bank of first deposit, or paying bank, identify it as fraudulent, many times the retailer loses.
Read MoreVijay Balakrishnan led a spirited webinar, hosted by Orbograph, addressing The State of Image Capture Technologies. It’s always interesting to take a retroactive look at what the vision was 5 years ago, and compare that to where we are today. In Vijay’s presentation, he looked at how the vision of distributed capture overall has been realized. But there are areas where the full potential has not fully been achieved.
Read MoreA recent post by Fraud Avengers caught our eye related to Cashier’s Checks. It’s interesting that this long time, reliable check source had become a target in many banks for counterfeiters. Fraudulent Cashier’s Checks typically become a deposit fraud loss at the bank of first deposit (BOFD) when the paying bank has strong controls in place for their incoming cashier’s checks. In order to best catch counterfeit Cashier’s Checks, a financial institution should implement strong image analysis and data analytics which can weed out items that have different check stock layouts as well as items with serial numbers out of range.
Read MoreCan you believe next week is BAI Payments Connect 2013 in Phoenix already? The theme this year is “Building a Customer Centric Payments Strategy”. It’s impressive to see the number of check recognition innovations… it covers every Payment Summit topic. Check out these developments…
Read MoreJoining the ECCHO 2013 Operations Committee meetings in Dallas was a luxury to a vendor like Orbograph. The level of details which are covered related to topics such as check clearing, check processing and deposits is not only a testament to the commitment of the organization to excellence, but explains rules and concepts which are seldom exposed within the walls of software vendors. Examples of detailed analysis and discussion topics which are invaluable include…
Read MoreIn the ever-changing landscape of payments fraud, one constant remains: fraudsters will always find a way. Traditional check fraud continues to linger as a loss conduit for financial institutions as well as retailers. The “traditional” activities of counterfeiting, forgeries, alterations and deposit fraud are still prevalent, but a new age of check fraud has already begun.
Read MoreIn our blog post on September 4, 2012, we talked about several risk factors for merchants, banks and mobile RDC users. One of the key points of recent interest was the process of managing deposited checks for a period of time before they are destroyed or shredded; or as defined in the FFIEC guidelines, “appropriate technology and process controls should be implemented at both the financial institution and the customer’s location to address operational risk.”
Read MoreThere are white papers galore written by the industry’s best teller image capture providers which explain the business case behind teller image capture. It’s encouraging to the market that this workflow is catching on in both large financial institutions and community banks. In fact, based on a recent flurry of large banks making decisions to move to teller image capture, the numbers for this market segment should reach nearly 60% per Celent.
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