What's in this white paper?
▸Checks remain a primary means of payment and are therefore the target of fraud.
▸Check fraud results in huge losses increasing the need to pursue improved check fraud detection methods, including signature verification, check stock verification, courtesy amount/ legal amount (CAR/LAR) mismatch detection, and payee match positive pay.
▸With AI and data, a Fraud Investigator can catch more fraud, review more items, and increase workflow productivity – all leading to less exposure.
▸Checks remain the primary means of fulfilling financial obligations. Technological advances coupled with increased availability at decreased costs have enabled criminals to engage in illegal and/or deceptive practices. These include signature forgery, counterfeit checks, and physical alteration of paper checks. Organizations can now benefit from a variety of efficient fraud prevention solutions that are cost-effective for both large banks and smaller organizations.
Check fraud has doubled over the years, pushing banks to find the right tools that will prevent this common type of fraud.
Payments are a fundamental part of everyday life for our consumer culture and global economy. Payments are the engine that drives all forms of economic activity, affecting all businesses, organizations, and consumers. Today we can choose from multiple payment options for any transaction: cash, checks, plastic cards, automated credit transfers, direct debits, online banking, mobile payments, etc. Regardless of payment method, consumers expect it to be secure and reliable.
Financial institutions and other payment processors must be service-oriented and committed to providing a variety of modern, user-friendly, efficient, and convenient payment options to customers at a time when exposure to payment fraud is greater than ever before. In fact, financial institutions filed more than 680,000 Suspicious Activity Reports (SARs) to FinCEN about potential check fraud in 2022. This is up from 350,000 SARs for potential check fraud in 2021, which was already a 23% increase in related SARs reported in 2020.1
The 2019 ABA Deposit Account Fraud Survey estimates check-related losses at $1.3 billion with banks preventing 91% of attempted check fraud.2 There are numerous ways these losses can occur as a result of forgery, counterfeiting, alterations, kiting, and embezzlement. Every time innovation is applied to an existing method of payment or a new payment option is introduced, it leads to new methods and schemes by criminals to perpetrate fraud.
However, payment system participants may significantly reduce risk and help avoid financial losses through awareness and use of the most current technological defenses against fraud. An example of an innovation that offers an all-around defense to one of the most vulnerable payment methods, checks, is a check recognition solution comprised of image analysis and pattern recognition technology.
