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bank fraud forum

The Community Against Fraud

July 9, 2009 by David Hood
2 comment(s)

I recently attended an IAFCI conference in Pennsylvania and wanted to share a few thoughts and observations from the event. First let me say that these events always reaffirm the strong sense of community that exists in fraud prevention. The underlying notion that a community that meets together, shares best practices and openly discusses challenges will be better equipped to fight fraud is directly in line with the purpose of the Bank Fraud Forum. Criminals are increasingly colluding to perpetrate their attacks, our industry must respond in kind with a unified front to thwart these attempts.

According to the attendees the level of fraud is definitely on the rise. From my conversations, almost all types of fraud are increasing. Most frequently I heard about check fraud, but a particularly interesting talk on Bust-Out schemes detailed how this type of fraud is increasing as well. A new wrinkle in Bust-Out schemes is that fraudsters have shifted tactics that in the past focused only on credit cards to retail bank deposit accounts and are now committing Bust-Out with checks and debit cards. There have recently been a couple of high profile attacks on credit unions in San Diego and Florida that come to mind as examples of possible Bust Out schemes.

One often mentioned topic was that schemes are becoming more sophisticated. I continually heard that access to information is a detriment that loss prevention professionals continue to struggle with. Investigators are still starved for the resources to quickly get their hands on the data they need to put a case together and share the data easily with PDs to prosecute the criminals.

I always leave these events looking forward to the next opportunity to get together, share stories and improve our collective odds at stopping more fraud.


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Recent Comments:

W Brown
July 27, 2009 - 7:49 AM
"I agree with your observations, wouldn't you agree that tighter system controls are required from ID verification through to AML/KYC screening and transaction monitoring? In the current climate, financial institutions understandably are finding it hard to balance genuine business risk against a "best practice" approach as stipulated by regulators, i.e. the financial hit because of fraud against the costs for ensuring their business is regulatory water tight. "
David Hood
July 11, 2010 - 8:29 PM
"I agree that controls are required from verification through transaction monitoring. In fact, best practices describe utilizing a "layered approach" combining the elements you have listed. I'd add though that it is increasingly becoming more difficult to tell a "good" customer from either a first party fraudster or a compromised account. Any solution or controls must be continuously evaluated for the value being provided. "