The Time Has Come

Over the past several weeks, you may have noticed that the problem of check fraud has received a lot of attention here on the Bank Fraud Forum. Why, you may ask, are we paying so much attention to this crusty old problem? We thought it was important to shine the spotlight on check fraud, not only because it continues to be a major loss area, but also because it's an interesting problem to consider.

Check fraud has been around seemingly forever. Every fraud prevention professional I know has their own collection of statistics,

and eye-popping anecdotes about check fraud. And yet, despite this vast collective knowledge of and experience with the issue, it's not going away any time soon. Check volumes may be trending down, but check fraud is definitely on the rise. Why is this?

For the most part, current approaches to fighting check fraud seem to be stuck in a bygone era. Overly simplistic fraud filters – whether they be manual or automated – spew out mostly false positive alerts, leaving overworked teams of analysts to comb through the wreckage looking for clues (in this case, the clues are the real fraud). The bittersweet result (on a macro scale, anyway) is that this approach does catch fraud, leading some banks and credit unions to believe they've got the problem under control. Perhaps but at what cost? And what types of more complex, cross-channel fraud – where bad checks are just one aspect of the scheme – are not being caught? For example, credit card "bust out" scams in which bad checks are used to pay off outstanding balances, freeing up the credit line for even more fraudulent charges. Check fraud is part of this, but is it being categorized as such?

In this day and age, we as an industry should have few excuses for not controlling a problem like check fraud. And do so at a reasonable cost! That second part is important, because as check fraud continues to grow, it's unlikely financial institutions can continue to throw manpower at the problem like they're doing today. It's time for modern analytical approaches and the latest technology to catch up with this age old problem.

At Memento, we like to think we're pitching in to be part of the solution. This week we announced our next generation check fraud solution. And while this isn't the forum to make our sales pitch, we invite you to hear from our experts and learn more about the investments we're making to help solve the problem of check fraud. If interested, you can read a check fraud white paper, register to attend a check fraud webinar, or even watch a brief check fraud solution video-demo. We'd really appreciate your feedback and ideas for helping us solve the problem.

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