banking fraudWhile banks and credit unions continue to strive to become more agile, accessible, and user-friendly the additional channels now available to customers are opening FIs up to new security loopholes that let fraudsters in. Today, we address some of these new security challenges as they relate to deposit fraud and what your institution can do to close the gaps and secure these channels.

Most Common Types of Deposit Fraud

  1. Money Laundering and Sanctions Screening – Money laundering is a challenging fraud type to track and stop because it’s one of the more sophisticated channels that fraudsters use. Banks and credit unions often use smart transaction segmentation to spot money laundering attempts as well as artificial intelligence software to provide better monitoring and transparency across the transactions flowing through the network.
  2. Credit Card Fraud – The widespread implementation of chip and pin technology has made traditional credit card fraud tactics like card skimmers and card hacking harder to pull off, but it remains a constant threat. Advanced Fraud Solutions’ TrueCards® product differs from traditional reactive approaches in that it allows institutions to determine the true point of compromise and block all cards at risk almost immediately, rather than waiting for industry alerts to inform on where the risks are coming from. In 2018, three types of card fraud schemes that took center stage are credit and debit card chip replacement, credit and debit card skimmers, and card cracking. Additionally, a significant portion of large banks experienced fraudulent funds withdrawals using ATMs. Read more in our recent post about the top 3 types of card fraud schemes of 2018.
  3. Mobile Fraud – Mobile deposit channels have been hit hard with counterfeit, duplicate, and forged checks because banks often do not have a strong screening process in place to vet the checks before they clear. TrueChecks® can be implemented across all mobile deposit channels to verify if a check is authentic if the account associated is in good standing, and if the balance on the check is available for withdrawal before it clears and hits the institution’s bottom line as a fraudulent loss.
  4. Identity and Social Fraud – This fraud type is still prevalent and requires banks to deploy sophisticated software solutions to help determine if the deposit frequency, amounts, and check or electronic transaction origin are within that customer’s normal behaviors or not. These tools offer customers and banking employees a balance between usability and security – spotting threats and identifying patterns of deposit fraud while not checking the individual deposit item at the time of presentment like the AFS solutions do.

Ways Banks and Credit Unions Can Reduce and Avoid Fraud Attempts

  • Stay engaged with customers and warn them frequently about common fraud schemes you are seeing
  • Invest in new/more advanced technology
  • Utilize any of the AFS fraud prevention solutions – watch a quick video to learn more now
  • Remain vigilant and continue looking for unusual trends among customer deposits
  • Assess all your deposit channels and make sure there is a screening solution in place across all of them – don’t leave any channel unprotected

Fighting fraud in the complex digital banking world today is a constant challenge. However, there are resources and new software solutions out there to help give your institution the advantage in winning the war. Learn more about AFS solutions today. Watch a quick video and request a free demo to get started.


Reference: 5 common Types of Banking Fraud- LinkedIn 




Tagged: News, counterfeit check, fraud tips, fraud news, deposit fraud, advanced fraud solutions, banking fraud, fighting check fraud, ach fraud, ach fraud prevention, ach scam, how to stop card fraud, credit and debit card fraud

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