But Can This Ai Technology Finally Help Put an End to It?
Fraud and risk teams at banks and credit unions have had enough. Since at least 2020, there’s been a parabolic increase in all forms of bank fraud, resulting in a drastic increase in mitigation and resolution costs.
But, while institutions have been focusing much of their fraud detection resources on sophisticated schemes (and often failing at detecting these), criminals have begun reverting to an “old school” method of stealing depositor money: Check fraud…
And it’s growing out of control.
The FBI has previously estimated that annual losses from check fraud have totaled roughly $18.7 billion, with more than a million fraudulent checks floating through the banking system, every day.
Yes, over a million fake checks a day…. Most of which pass as legitimate.
However startling these figures may be, they represent check fraud data prior to last year. The new data for 2022 is far more frightening, and the ramifications for banks and credit unions far more severe.
The Financial Crimes Enforcement Network (FinCEN) just reported that in 2022 alone, the banking industry saw a remarkable 84% increase in check fraud. This means potential losses may have topped a whopping $34.4 billion last year.
An 84% increase in check fraud is astonishing. Astonishing even for those institutions who may be handling hundreds of fake checks every day.
Of course, risk and fraud teams at banks and credit unions are well aware of this drastic rise in check fraud and have been pouring in new resources and expensive man-hours to deal with it.
As a result, the entire industry has grown exhausted from combating a seemingly unwinnable war against check fraud. Clearly, the current tools they’re using to fight it are not working.
However, a real-time artificial intelligence system, developed by ToolCASE LLC, may be the solution the entire industry has been anxiously waiting for. It’s a solution that, unlike the investigation of post-transactional batched data, can detect potentially fraudulent checks at the point of deposit…
Meaning investigators don’t have to wait for the batch data to be processed before being notified of a potential threat. Instead, they can be notified in real-time.
We’ll discuss this breakthrough solution, and how it can help put an end to your mounting check fraud losses, momentarily.
But first, why has check fraud recently become such a major issue, and potential disaster for banks and credit unions?
Well, the reasons are threefold. As discussed earlier, many financial institutions have put their investigatory resources towards detecting sophisticated financial crimes.
Many criminals know this and have switched their efforts to a fraud that has, until now, largely been overlooked or gone undetected by risk and fraud teams.
Secondly, because of the demands on law enforcement, roughly 75% of check fraudsters are not pursued or prosecuted, giving them near free reign to conduct their crimes.
Finally, because most check fraud investigations occur after the fraud team has been notified in post-transactional data, fraudsters have plenty of time to steal.
They have the motive, the opportunity, and a lack of consequences. It’s the perfect mix that any criminal would take advantage of.
Now, there are a number of forms a check fraud can take, and here are a few of the most common ones your institution is probably experiencing:
- Identity Theft Check Fraud: using stolen PII, a fraudster opens an account in another person’s name. They then begin writing checks until the institution catches on to the scheme. That is, If they catch on at all.
- Check Forgery: Check forgers steal blank checks, make themselves the payee, forge the signature of the payor (account holder) and deposit the check.
- Check Washing: Fraudsters steal written checks, often from the US Postal system, erase payee information and payee amounts, then replace these data with their own account info and deposit the check.
- Paperhanging: this is the deliberate writing of checks the fraudster knows cannot clear. Perhaps due to a closed account, insufficient funds, etc.
- Check Floating: like paperhanging, check floating involves writing a check that will not clear, but may clear by the time the “float” period ends.
These are just some common check frauds that have led to the incredible 84% increase in check fraud last year. And, today, with mobile check deposits, a fraudster doesn’t even need to use an ATM or branch to conduct these crimes.
All they need to do is take a picture of the fraudulent check with their phone, deposit the funds… then transfer funds before the fraud team’s batch analysis is complete. Again, they’ve got plenty of time to do the crime.
Its why check fraud has become such an expensive headache for banks and credit unions.
But there is a solution.
With 2022’s check fraud losses alone having potentially topped $34 billion – this year could be far worse – it’s time for financial institutions to fight back efficiently, cost effectively and successfully.
It’s time to fight back with something that actually works.
Now, it was once thought that only large, well-capitalized institutions have the resources to accomplish something like this. However, recent advances in artificial intelligence have proven to not only help detect and prevent check fraud at banks and credit unions, but thanks to ToolCASE it’s now become economically accessible to institutions of all sizes.
Simply put, properly combating check fraud with ToolCASE could SAVE your institution money, rather than costing it.
This solution has already helped financial institutions of all sizes save hundreds of millions of dollars in fraud costs, and it can now help save yours too.
Better yet, ToolCASE’s remarkable Ai-powered fraud detection and prevention system goes far beyond just check fraud. It has the capability to detect and prevent almost any kind of transactional fraud, in real-time!
Yes, ToolCASE is an all-encompassing, real-time fraud detection and prevention solution for all transactional banking…
Even for those sophisticated crimes your risk and fraud team have been concentrating on can be detected far more efficiently and effectively with ToolCASE.
Let’s face it, real-time fraud detection is superior to post-transactional fraud detection. You, your fraud team, and your clients/members deserve the real-time protections that ToolCASE offers.
You must consider experiencing a full demonstration of the remarkable ToolCASE fraud detection and prevention technology and discover how it helps financial institutions like yours save massively on fraud costs, right now.
Visit www.toolcase.com or click HERE to schedule your free one-on-one demo and see why criminals are no match for ToolCASE!
Criminals use Telegram to recruit ‘walkers’ as America’s big banks see an 84% increase in check fraud (cnbc.com)
Check Fraud Statistics & Techniques You Should Know About (relyco.com)