Modernizing Omnichannel Check Fraud Detection

Among the myriad fraud schemes emerging during the COVID-19 crisis are “money mule schemes.” A money mule is “a person who transfers illegally acquired money on behalf of or at the direction of another.” These are scams that, frankly, take advantage of the desperation some persons and businesses feel due to to COVID-19 economic impacts. In this climate, actors are able to fairly easily deceive otherwise savvy victims by impersonating federal government agencies, international organizations, or charities.

Pymnts.com looks at the startling emerging story of a Germany payments company called Wirecard, where as much as $2.1 billion may be unaccounted for.

The story notes that “even the largest companies with the most resources to digitize and combat fraud are not immune to the risk — from both within and outside of, the organization.”

As noted many times both here and in the general media, check fraud persistent and pervasive — and now compounded by fraudsters constructing corona virus-related scams.

Financial institutions should be on high alert for scams and fraud schemes that target the institution itself and/or its customers. It is equally important for financial institutions to evaluate their current check fraud processes and technologies and identify any possible gaps.

This is a fairly typical fraud scheme that many, if not all of us, have encountered within our email inboxes. While we would normally mark the email as “spam,” delete it from our inbox, and move on with our day, there is a reason fraudsters continue to utilize this scam. The emails are sent to a large number of email addresses in hopes to find a less technically savvy individuals.

According to Frank on Fraud, there are 16 main types of check fraud On the surface, check fraud growth defies logic A huge amount of check fraud goes unreported – – up to $1.2 billion in losses per year, in fact FRANK ON FRAUD is a terrific (and entertaining) blog by Frank McKenna, the Co-Founder…

Javelin Strategy & Research has made available their 2020 Identity Fraud Study (available for download here). The data presents a sobering outlook:

The results of Javelin’s 2020 Identity Fraud Survey serve as a wake-up call—one that will force financial institutions, businesses, and the payment industry to reevaluate how identity fraud is managed. Total identity fraud reached $16.9 billion (USD) in 2019, yet the dollar loss is only part of the story. To have a more fulsome understanding of identity fraud a comprehensive evaluation of the drop in number of victims lead to several unsettling findings. Criminals are targeting smaller numbers of victims, while inflicting damage that is more complex to prevent or remediate.

The Office of the Comptroller of the Currency (under the jurisdiction of the US Department of the Treasury) has rolled out an easy-to-use check fraud and forgery resource at HelpWithMyBank.gov that represents a valuable and easily accessible tool for banks and their customers.

In April our post featured “celebrity fraudster” Matt Cox as he described his methods for perpetrating check fraud. He knows of which he speaks; he is the author of the book Shark in the Housing Pool: On the Run With the Secret Service’s Most Wanted (out of 15 Amazon reviews, it has 14 five-star ratings — but let’s remember that the author is a professional fraudster…)