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Examining the Deposit Fraud Trends in 2024

  • Deposit fraud prevention is crucial for protecting account holders and the institution's reputation
  • Check fraud and mobile deposit scams are on the rise, with mobile banking usage and mobile fraud both increasing
  • Scams targeting older generations and tech-savvy individuals are also getting more common

Advanced Fraud Solutions has released their 2024 Deposit Fraud Trends Report -- describing the complexity with deposit fraud, particularly as "new scams emerge every week, technologies evolve at lightning speed, and unforeseen events like pandemics add to the challenge."

The report notes that there were 1 million cases of deposit related fraud in first half of 2023. It's crucial for financial institutions to be aware of the scams to better protect themselves and their customers.

With the staggering number of deposit-related fraud cases in 2023, what can we expect for 2024?

Deposit Fraud Trends for 2024

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While check fraud and mobile deposits are payment vehicles at the heart of scams, it's the different ways fraudsters are approaching victims that make them more effective. With this is mind, the report details the following to be aware of: "job listing scams" and "muse scams." They utilize different websites such as social media sites or job platforms to execute their scams.

Additionally, the report dives into deposit-related ACH scams and presents them as the "The Next Frontier of Deposit Fraud." AFS details different scams such as the "Renters scam," but also looks at the generations that fall victim. While Baby Boomers are typically the associated with falling victims to newer scams, tech-savvy individuals are targets as well:

For older generations, scams targeting Social Security or Medicare are rising. These individuals trust government and authoritative bodies, making them susceptible to fraudulent schemes. For instance, fraudulent emails or calls imitating government agencies might promise enhanced benefits or urgent updates, prompting seniors to divulge sensitive deposit account information.

Younger generations exhibit a different vulnerability: their comfort and reliance on technology. For them, app updates are routine necessities. Scammers exploit this trust in tech by orchestrating fake mobile payment app updates. Gen Z and millennials, accustomed to digital interactions, mindlessly click links or download updates without verifying their authenticity, and then follow instructions to add their checking account and routing number into the “updated app”.

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Check Payments Still a Major Target for Deposit Fraud in 2024

Over the past few years, many experts have estimated that check fraud has increased 3-4X. And, according to AFS, this trend will continue:

Check fraud is still a big problem, and data shows it’s not slowing down. Insights from the Association for Financial Professionals' (AFP) 2022 Payments Fraud and Control Survey highlight checks as the prime target, accounting for 63% of reported fraud incidents within organizations.

This is exacerbated by the adoption of mobile remote deposit capture (mRDC) -- enabling fraudsters to deposit checks without a person physically examining the check.

AFS recommends the following to prevent check and mobile scams:

  • For check fraud prevention, all FI staff need to stay up to date on the latest scams so they can help sense and protect account holders from falling prey to a scheme.
  • With the surge in mobile banking, FIs need to continually monitor and fortify security protocols for the mobile channel.
  • This includes robust authentication, real-time transaction monitoring, and user behavior analytics to swiftly identify and mitigate fraudulent activities.
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In addition, financial institutions need to deploy image forensic AI to analyze the images of checks for counterfeits, forgeries, and alterations, as well as validate the negotiable fields. This provides a full scope detection strategy for check fraud in 2024 and beyond.

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