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#OrboIntelligence Check Fraud Resource Hub

Your centralized resource for primary and secondary research, industry trends, and 3rd party reports.

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Welcome to the #OrboIntelligence Check Fraud Resource Hub

Over the past 3 years, the banking industry has seen a meteoric increase in check fraud -- even with a decrease in check volumes. Traditionally the industry relied on the ABA Deposit Account Fraud Survey as the primary resource for data and trends on check fraud. However, today there are a wider range of resources available with a new report being published virtually every month.

 

To better serve the industry, OrboGraph not only executes its own research, but is taking a leading role in consolidating these materials into a centralized hub. In the fight against check fraud, the more information that is readily available, the better outcomes we as an industry can achieve.

 

We hope you find this hub to be beneficial. Please email marketing@orbograph.com if you would like to suggest/add additional resources or reports.

Auriemma Bank Fraud Control

In an interview with Frank McKenna of the Frank on Frank blog, Troy Huth, Director of Bank Fraud Control at Auriemma, shared some shocking research data: Check Deposit Fraud is up a whopping 385% in 2022 -- exceeding the industry belief that check fraud has increased 3X from pre-pandemic levels.

The company collected benchmarking data from 2021 and 2022 and calculated each year’s total check deposit fraud rate. The check deposit fraud rate is measured as total check deposit losses divided by total check deposit transaction dollars.

Source: Frank on Fraud Blog

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Abrigo -- Check Fraud White Papers

Check Fraud: New Tech Driving Old School Scam

The Dark Web: An Online Market for Stolen Checks

NICE Actimize: Attempted Check Fraud Up +171% in 2022

The 2023 NICE Actimize Fraud Insights Report entitled Check Fraud Running Rampant in 2023 shows a significant spike in check fraud that correlates to first-party deposit fraud. In this scenario, bad actors are opening bogus bank accounts for the sole purpose to defraud the bank. This is done by depositing forged or counterfeit check items into accounts, then depleting the accounts before the funds are reversed.

An even more alarming scenario is consumers falling victim to scams: They receive fraudulent checks from fraudsters, deposit the items into their accounts and are told to keep some, but send a majority to the fraudster. The fraudulent funds are later returned, leaving accounts in overdraft. Typically, these funds are charged off by financial institutions.

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Thomson Reuters -- Suspicious Activity Reports Surge: 2023 Filings Expected to Set Another Record

According to the Thomson Reuters Regulatory Intelligence special report based on analysis of public data released by the U.S. Treasury Department’s anti-money laundering (AML) unit, FinCEN, there has been a significant increase in SARs (Suspicious Activity Reports) recorded in 2022.

The report shows that SARs filings soared in virtually all categories -- with particularly massive spikes in human exploitation, elder fraud, and government-related benefit scams are noteworthy. Such vulnerable populations have grown in both size and susceptibility, especially among migrants and the elderly.

As noted on page 23 of the report:

"Check fraud, was by far the most prevalent fraud type reported in 2022, with over 680,000 SAR filings. It was the second largest of all SAR categories that year. While firms have responded by reinforcing their anti-fraud organizations overall, they have focused particular attention on check fraud. While firms have responded by reinforcing their anti-fraud organizations overall, they have focused particular attention on check fraud."

According to Reuters, we're seeing a continued surge in Q1 of 2023 as check fraud related SARs exceeded 185K.

BlueVoyant: Checking Out: How Cyber Threat Actors Use Physical Checks to Commit Fraud

Over the past year, BlueVoyant has observed a significant spike in the trade of compromised and fraudulent checks on the deep and dark web. Threat actors steal checks from the mail or create counterfeit versions that are virtually indecipherable from authentic ones, selling them on cybercrime forums at great profit or using them to deposit significant amounts of money into their own accounts.

Aite-Novarica: Fraud Trends for 2023 and Beyond: Everything Old is New Again

Fraud Trends for 2023 and Beyond: Everything Old is New Again is Aite-Novarica Group's latest research report, surveying 34 U.S. fraud executives who attended Aite-Novarica Group’s Financial Crime Forum in September 2022 in order to better understand the current and future environment for fraud trends.

InfoSecurity Risk: FraudToday.io Check Fraud Series

Check Fraud: What Hurdles
Are Facing Banks?

Georgia State's David Maimon on Why Banks Have Not Been
Able to Tackle Check Fraud

New Tools and Integration Are
Detecting Check Fraud Faster

Trace Fooshee of Aite-Novarica on
Detecting Fraud With Image Analysis Solutions

Source:  FraudToday.io

Source:  FraudToday.io

The Loss Prevention Magazine Podcast: Interview with Ex-Check Fraudster

In an exclusive interview with The Loss Prevention Magazine Podcast, ex-fraudster turned #FraudFighter Alexander Hall details the ins and outs of check fraud. He describes, from set-up to recruiting, how inexpensive and profitable this sort of fraud can be -- and why, therefor, it's important to have effective defenses in place.

InfoSecurity Risk: FraudToday.io Check Fraud Series

Check Fraud: What Hurdles
Are Facing Banks?

Georgia State's David Maimon on Why Banks Have Not Been
Able to Tackle Check Fraud

New Tools and Integration Are
Detecting Check Fraud Faster

Trace Fooshee of Aite-Novarica on
Detecting Fraud With Image Analysis Solutions

Source:  FraudToday.io

Source:  FraudToday.io

BAI: The State of Fraud in Financial Services

  • Check fraud still ranks among the top fraud in both 1st and 3rd party fraud
  • Check fraud is ranked 5th in reported fraud by customers
    • Frank McKenna, the Co-Founder and Chief Fraud Strategist for PointPredictive, notes that a potentially $1.2B that is not reported to banks.

BAI Executive Report: Finding an edge in fraud’s cat-and-mouse game

This BAI Executive Report examines where things stand with fraud protection and how it can be done more efficiently and effectively, including looking at the role of both humans and technology in fraud prevention strategies.

Topics Include:

  • The art and science of fraud prevention
  • Deposit accounts in the fraud crosshairs
  • Banks need to be ready for better deep fakes
  • Fraud detection is faster, yet still too slow
  • Striking a balance between fraud and friction
  • Managing the risks and rewards of faster payments
  • Mitigating the challenges of "piggybacking"
  • Protection from check fraud in a digital world

Click here to download the report.

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Check Washing Experiment: Putting Gel Ink Pens to the Test

Recently, YouTuber Robb's Homemade Life examined gel pens and their effectiveness, testing Uniball, Pilot G2, and standard "click" ball point pens against an array of four commonly used solutions that fraudsters deploy when attempting to wash checks. (Robb responsibly did not reveal the solutions used -- except to note that they are "all available at Walgreens-Mart or Home Depot."). Remember that gel pens are building a reputation as very effective against washing.

Check Fraud: Understanding the Elements and Bad Actors

Infamous Ghost Money, a masked YouTuber whose channel about "fraud awareness and prevention" has been featured in our blog previously, recently discussed the "updated climate of check fraud" the way only Infamous Ghost Money can do it -- with a mask on.

2022 NICE Actimize Fraud Insights Report

NICE Actimize notes that they experienced an increase of 8% in check transaction volumes in 2021 and an increase of 106% in attempted fraud dollar value or checks in 2021.

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2020 ABA Deposit Account Fraud Survey

The 2020 ABA Deposit Account Fraud Survey collects baseline information on check, debit card, and electronic payment fraud losses, and the actions taken by banks to reduce these losses. This bi-annual study is regarded as a major resource for check fraud.

Click here to download the report.

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PwC’s Global Economic Crime and Fraud Survey 2022

PwC's Global Economic Crime and Fraud Survey 2022 respondents reported total losses of US$42B, on top of the damage to brand, reputation and market share.

Exploration of Check Fraud in 2020

OrboGraph's Exploration of Check Fraud in 2020 is a compendium of data gathered from a short, focused survey which was designed to "take a snapshot” of check fraud trends for 2020.

This survey was delivered to financial institutions that include small community, regional, and large US banks. We designed questions to identify trends involving check fraud attempts and losses for both on-us and deposit fraud. Each question was tabulated with overall totals as well as cross-tabulated by size of organization.

Conclusions:

  1. On-us check fraud attempts: significant increase
  2. Deposit check fraud attempts: modest-to-significant increase
  3. On-us check fraud losses: low-to-modest increase
    1. Community banks seeing stable or reduction in losses
    2. 5-20B and 21-100B seeing modest increases
  4. Deposit check fraud losses: modest increase
    1. Community banks seeing stable or reduction in losses
    2. 5-20B and 21-100B seeing modest increases
  5. Community bank responses are generally experiencing less fraud attempts then mid to large banks
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2022 Gartner® Market Guide for Online Fraud Detection

As online fraud detection grows beyond traditional use cases, what qualities should security and risk management leaders look out for in a solution? Get key recommendations for navigating the online fraud detection market from Gartner Research.

Read the Market Guide to learn:

  • Why businesses should favor vendors with global networks for effective fraud detection
  • How to derive more value from online fraud detection solutions
  • What key developments are expected in the online fraud detection market

Click here to download the report.

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IDology: The Cost of Fraud: B2B Payments Experience 10% Increase During the Pandemic

  • 69% of companies reported an increase in year over year fraud attempts
  • This is an increase of 53% compared to the prior year
  • Only 14% reported a decrease in fraud attempts
  • 18% reported that it stayed the same

2021 AFP® Payments Fraud and Control Report

  • In 2021, checks and ACH debits were the payment methods most impacted by fraud activity (66 percent and 37 percent, respectively).
  • Sixty-eight percent of organizations were targeted by Business Email Compromise (BEC) in 2021, which is a sharp decrease from last year’s figure of 76 percent and the second lowest figure since AFP began tracking this data.
  • Accounts Payable (AP) departments are most susceptible to BEC fraud, 58 percent of respondents report that their AP department was targeted by email scams.
  • The majority of organizations (two-thirds) is validating payment beneficiary information either through their vendor/bank or by using an external service

 

LexisNexis: The True Cost of Fraud Study

  • $4.00 in Fraud Costs per $1.00 Fraud Loss
  • Fraud costs rise 19.8% since 2019

Fraud/ol/ogy Podcast -- Hosted by Fraud Fighter Karisse Hendrick

Source: Fraud/ol/ogy Postcast

 

Fraud Fighter Karisse Hendrick has taken her passion for the world of fraud prevention and chargeback reduction and created the Fraud/ol/ogy Podcast. On the podcast, Karisse dives into all areas of Fraudology from the perspective of a fraud-fighter.

In this podcast, Kendrick speaks with Frank McKenna (from the popular blog "Frank on Fraud") about another growing fraud trend impacting the US especially. Physical Check Fraud. While many may assume that check fraud ended when credit card fraud became popular, it is getting a resurgence. In fact, check fraud utilizing stolen, physical checks is so lucrative that it has been the reason for a steep uptick in physically violent attacks on US Postal Workers.

The podcast also references Frank Albergo, the National President of the US Postal Police Officers Association who frequently posts news articles about the postal worker violence and David Maimon of Georgia State University who posts great information & research on the topic of check washing & physical check fraud.

Georgia State University’s Evidence Based Cybersecurity Research Group

  • 5,300 stolen checks sold on the dark web from 60 tracked chat rooms
  • Estimated $10M to over $30M in Check Fraud Losses Due to Mail Theft

 

FRAUDWIT - Fraud Education and Satire

FraudWit.com takes an alternative approach to fraud education.  With short, quirky, and humorous articles and other content, the site opts to teach using satire.  Content is created with two groups in mind; consumers and fraud professionals.  Information to consumers is used to prevent victimization while information directed towards anti-fraud professionals is to catalyze the industry and address fraud fighting fatigue (FFF).

Click here to visit FRAUDWIT.

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Frank on Fraud Blog

Highlights from blog:

  • Frank McKenna, the Co-Founder and Chief Fraud Strategist for PointPredictive, notes that a potentially $1.2B that is not reported to banks in 2018.
  • Mailbox keys are worth up to $7,000 on the dark web -- fueling postal mailbox and carrier robberies
  • Armed robbery against postal works has surged 300% from 2018 to 2021
  • In the past 2 years, there have been over 2,000 assaults and robberies of postal carriers

 

Blog posts on check fraud:

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Source: Frank on Fraud Blog

 

Abrigo Webinar: Check your checks and imposters: Latest fraud trends (2022)

To your knowledge, how large of a percentage is check fraud of total bank account theft?

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Additional Check Fraud Resources

AI Forensic Fraud is the latest technology for signature verification.

Interview: Forensic Document Examination: Impact on Banking, Fraud, and Payments

Forensic document examination is foundational to OrboGraph’s OrbNet Forensic AI technology...

 

Click here to download the interview.

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#OrboZone Fraud Detection

Check fraud continues to persist...new technologies can combat these bad actors...

 

Click here to see Fraud Detection technology advancements with our videos and photo gallery...

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Article: OrboGraph Recognized as 2021 “Top 5 Fraud Detection & Prevention Software Companies”

OrboGraph featured in the article: New Innovations
In Imaged-Based AI Fraud Detection
Technology.

 

Click here to read the article.

Modernizing Omnichannel Check Fraud Detection Blog

Is Instant Disbursement the Answer to Fraud?

Check fraud continues to grow at an alarming rate PYMNTS reports Fed recommendation of electronic payment methods, or ...
Read More

Starting from the Beginning: Common Check Fraud Scams and Examples

There are common fraud tactics to look out for Check fraud is on the increase Consumers can stop ...
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Bank M&A: Fraud Concerns with Legacy Systems

Michael Hsu backs FDIC's proposal for increased scrutiny of bank mergers surpassing $100 billion Legacy systems in banking ...
Read More

Ex-US Secret Service Member Recounts the History of Check Fraud Investigations

The United State Secret Service also investigates financial crimes Check fraud detection used much different methods in the ...
Read More

Push Notifications – Putting the Onus of Check Fraud on Consumers?

Check fraud is on the rise in the US Fraudsters have many methods at their disposal Direct engagement ...
Read More

OrboNation Newsletter: Check Processing and Fraud – March 2024

Download PDF Copy of the Newsletter The Importance of Deploying a Rules Engine in Check Fraud Detection The ...
Read More