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Advanced Fraud Solutions

First in Fraud Defense

  • Who We Work With
        • WHO WE WORK WITH

        • Credit Unions
        • Half of the top 100 credit unions trust Advanced Fraud Solutions to serve as their omnichannel deposit fraud mitigation systems, protecting check, card and ACH.

        • Banks
        • Banks from $100 million to $100 billion rely on Advanced Fraud Solutions for their deposit fraud data, and to help them make real-time decisions on items.

        • Partners
        • Financial services hardware and software providers partner with Advanced Fraud Solutions because of their industry-leading fraud mitigation services and years of experience.

  • Solutions
        • SOLUTIONS

        • TrueChecks Logo
        • TrueChecks®
        • Despite falling check volume and usage, check fraud continues to rise. Our real-time deposit fraud detection software catches bad checks and reduces losses for banks and credit unions.

        • TrueCards Logo
        • TrueCards®
        • Learn about Advanced Fraud Solutions’ card fraud detection tools that use Dark Web sources to pinpoint at-risk cards in your debit and/or credit portfolio.

        • AFS Positive Pay Logo
        • Positive Pay by AFS
        • Learn about Advanced Fraud Solutions’ proactive check and ACH payment monitoring tool that helps financial institutions and businesses mitigate vendor and payroll fraud.

        • TrueACH® with Account Validation
        • Learn about Advanced Fraud Solutions’ ACH account validation tool that helps keep financial institutions in compliance and reduces faster payments fraud.

  • Insights
    • Check Fraud
          • 2022_Changing Landscape of Check Fraud
          • 2022: Changing Landscape Of Check Fraud

            Check fraud remains a pervasive issue. Banks and credit unions still cite check as a major fraud risk. Even despite a lower volume of checks in circulation, fraud… Download now>>

          • Check Fraud Remains a Significant Threat_300x123
          • Check Fraud Remains a Significant Threat

            Check fraud remains tenaciously persistent. Fraudsters continue to take advantage of access to inexpensive technology, social engineering tactics, and remote business practices to engage in illegal and deceptive check fraud schemes. Read now>>

          • Advanced Fraud Solutions Appoints Jordan Bothwell to Vice President of Strategic Partnerships_300x123
          • Advanced Fraud Solutions Appoints Jordan Bothwell to Vice President of Strategic Partnerships

            Advanced Fraud Solutions announced the appointment of Jordan Bothwell to Vice President of Strategic Partnerships. Jordan joins the position following a decade of experience in fraud prevention and… Read now>>

    • Card Fraud
          • Shedding Light On The Dark Web
          • Shedding Light On The Dark Web

            The Dark Web is home to many of the fraudsters targeting credit unions and banks. In this webinar, hosted by Q6 Cyber and Advanced Fraud Solutions, we will venture into the Dark Web (back by popular demand!) and profile the latest trends in financial fraud and cybercrime. Watch now>>

          • Advanced Fraud Solutions Adds Enhancements To TrueCards Platform
          • Advanced Fraud Solutions Adds Enhancements To TrueCards Platform

            Advanced Fraud Solutions (AFS), a leader in deposit fraud detection software, today announced updates to the TrueCards® platform, AFS’ omnichannel debit and credit card fraud prevention solution. Read more>>

          • Beating BIN Attacks: How To Protect Against Card-Not-Present Fraud
          • Beating BIN Attacks: How To Protect Against Card-Not-Present Fraud

            Card-not-present fraud (CNP) continues to flourish. In fact, there’s been a 25% increase in exposed CNP records, a total of 45 million, since 2019. Download now>>

    • ACH Fraud
      • Protecting ACH Payments_2022
      • Advanced Fraud Solutions Announces New Account Validation Tool to Address Nacha’s WEB Debit Account Validation Rule
      • How Financial Institutions Can Manage ACH Risk_300x123
      • Protecting ACH Payments

        How do financial institutions, who increasingly rely on ACH, safeguard faster payments and stay in compliance with Nacha? AFS’ new report issues related to fraud and compliance have also become top-of-mind for financial institutions.  Download now>>

      • AFS Announces New Account Validation Tool to Address Nacha’s WEB Debit Account Validation Rule

        AFS announced TrueACH® with Account Validation – a new ACH tool that enables financial institutions to confirm account status and authorized user(s). TrueACH with Account Validation was developed in response to Nacha’s WEB Debit Account Validation Rule, which requires financial institutions to apply a “commercially reasonable… Read more>>

      • How Financial Institutions Can Manage ACH Risk

        Financial institutions increasingly rely on the ACH Network to facilitate transactions. With that comes a responsibility to manage ACH risk, including helping to prevent fraudulent payments and mitigate any potential losses. Read more>>

    • Positive Pay
      • Fighting Fraud: How To Secure Business Accounts Against The Latest Fraud Tactics, Threats
      • Advanced Fraud Solutions Announces New Positive Pay Solution To Help Financial Institutions Fight Vendor Fraud
      • Looking Out For Payroll And Vendor Fraud: A Financial Institution's Guide
      • Fighting Fraud: How To Secure Business Accounts Against The Latest Fraud Tactics, Threats

        Amid the COVID-19 pandemic, fraud operators have capitalized on the behavioral shifts of workers and consumers, as well as the migration of payments online and the massive increase in PPP loans, stimulus checks, and expansion of unemployment benefits. Watch now>>

      • Advanced Fraud Solutions Announces New Positive Pay Solution To Help Financial Institutions Fight Vendor Fraud

        Advanced Fraud Solutions (AFS), a leading provider of deposit fraud detection software, today announced the launch of AFS Positive Pay – a positive pay solution designed so that financial institutions, and their enterprise customers, can proactively monitor changes in payments information. Read now>>

      • Looking Out For Payroll And Vendor Fraud: A Financial Institution’s Guide

        A financial institution’s guide to protecting business accounts from payment tampering, redirection, and business e-mail compromise. Download Now>>

    • Consumer Scams
      • Beware Of Mobile Deposit Scams
      • Romance Scams On The Rise: How Fraud Operators Exploit The Rise Of Online Dating In A Socially-Distant World
      • Four Dangerous Stimulus Scams
      • Beware Of Mobile Deposit Scams

        According to the FBI, there has been a 50% surge in mobile banking since the beginning of 2020. Download now>>

      • Romance Scams On The Rise: How Fraud Operators Exploit The Rise Of Online Dating In A Socially-Distant World

        The rise in online dating sites, coupled with the onset of social distancing in 2020, have helped make personal loneliness a target for virtual con artists. Download now>>

      • Four Dangerous Stimulus Scams

        Reports of stimulus payment-related fraud have sharply increased following the passage of the second stimulus package. Read now>>

    • Business Banking
      • Looking Out For Payroll And Vendor Fraud: A Financial Institution’s Guide
      • Protecting Business Accounts Against Fraud
      • How Banks And Credit Unions Can Build A Culture To Fight Fraud
      • Looking Out For Payroll And Vendor Fraud: A Financial Institution’s Guide

        A financial institution’s guide to protecting business accounts from payment tampering, redirection, and business e-mail compromise. Download Now>>

      • Protect Business Accounts Against Fraud

        For businesses, trust in their financial institution is paramount. But with so many businesses under attack from fraud operators, where do they turn? In this webinar, the AFS fraud experts explore the latest fraud tactics — including BEC, vendor and payroll fraud — being deployed against businesses… Watch now>>

      • How Banks And Credit Unions Can Build A Culture To Fight Fraud

        Among all the things we train our customers on here at AFS, teaching them the tips and tricks of catching deposit fraud is one of the most important. Read now>>

    • Webinars
      • ACH Payments: Preventing Fraud, Addressing Compliance

        Join AFS experts as they discuss the latest threats to faster payments; how to best safeguard ACH transitions; and what measures banks and credit unions can take to meet Nacha’s account validation requirements. Download Now>>

      • Protect Business Accounts Against Fraud

        In this webinar, the fraud experts at Advanced Fraud Solutions will explore the latest fraud tactics — including business email compromise, vendor and payroll fraud — being deployed against businesses and what financial institutions can do to help businesses proactively identify fraud, mitigate their losses and protect mobile deposits. Download Now>>

      • AFS Presents: Check Fraud Prevention 2021

        Fake check scams cases spiked in 2020. Fraud operators spied opportunities to accelerate their attacks and profit off of romance scams, secret shopper scams, unemployment scams and other fraud schemes. Download now>>

    • White Papers
      • The Changing Landscape Of Check Fraud

        In 2020, check fraud was down, due in part to branch closings and the migration to digital payment methods. Download now>>

      • Beating BIN Attacks: How To Protect Against Card-Not-Present Fraud

        Card-not-present fraud (CNP) continues to flourish. In fact, there’s been a 25% increase in exposed CNP records, a total of 45 million, since 2019. Download now>>

      • Protecting ACH Payments

        How do financial institutions, who increasingly rely on ACH, safeguard faster payments and stay in compliance with Nacha? AFS’ new report issues related to fraud and compliance have also become top-of-mind for financial institutions.  Download now>>

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Prosecuting Bad Checks | A Guide For Financial Institutions To Fight Back

Prosecuting Bad Checks | A Guide For Financial Institutions To Fight Back

Check fraud before it is deposited is obviously the ideal scenario for banks and credit unions. This situation avoids the litigation and expense of prosecuting for fraud. Not to mention, it avoids the fraud loss of bad checks. However, when bad items do sneak through, there are some important things banks can do to fight back and prosecute repeat check fraud offenders. Here is what you need to know to act to prosecute fraud attempts at your financial institution.

Check fraud is a serious offense and comes with very real legal consequences which vary by state. Depending on the severity of the crime, the amount that was defrauded, and the number of instances of fraud the perpetrator completed, check fraud can be either a misdemeanor or a felony.

Learn about TrueChecks®

Check fraud in the U.S. can carry severe penalties. Punishments include fines up to one million dollars, prison sentences exceeding 30-years, or a combination of the two.  Additionally, many first-time offenders who previously held no criminal background at all have received harsh sentences for a first offense in financial fraud. There may be recourse at both the state (criminal) and civil level.

Possible check fraud defenses

If you wondering, can a bank press charges for bad checks, chances are your financial institution may be experiencing fraud. First, there are some caveats FIs need to consider before pursuing a check fraud or bad check lawsuit including if: 

Was the check post-dated

If the bad check was post-dated with a date after the date it was presented, then it may not qualify as a fraudulent check. In this case, the ‘fraud’ is extending a line of credit and is technically in a bad debt situation.

Stop payment

The fraudster stops payment on a bad check, this could be used as defense.  However, it must be stopped before an insufficient funds notice returns. So, if a bank or credit union wants to prosecute a fraud attempt it has to have gone through to insufficient funds causing the financial institution to incur a loss on the check.

Antecedent debt

There is evidence of a payment of antecedent debt.

Insufficient money notice

The maker wrote the bank an insufficient money notice with a promise to repay, thereby creating a temporary credit extension.

Prior dealings

There were prior dealings of both parties involved.

Issues of intoxication

The issuer were proven insane or intoxicated during the writing.

Traceable to another party

Fraudulent activity were traced to someone else other than the accused.

Lack of knowledge

The issuer had a lack of knowledge that the check would not be honored. 

Character

The defendant is in good community standing and deemed of good character. 

photo of paper check with pen on top

Counterfeit or altered checks

Typically, businesses are the primary targets of check fraud professionals. Oftentimes, organized groups of criminals who work together to perpetrate these crimes. As far as counterfeiting and alteration, payroll checks are a favorite fraudulent item to manufacture. However, all forms of business checks are targets, and all forms of fraud techniques are practiced as well.

Businesses do have some responsibility to ensure their checks are secure. Recently revised UCC regulations add the onus of shared responsibility for check fraud on the business.

For example, if a bank offers their customer check stock that contains security features that could have prevented a specific case of fraud, the bank can claim that the customer was negligent and therefore at least partially liable for the fraud loss.

There are several precautions businesses can take to help mitigate being targeted for check fraud including adding security features to checks that make it more difficult for fraudsters to counterfeit or alter checks. Furthermore, reserves of checks, deposit slips, and other banking documents should be kept in a locked, secured facility.

Lastly, it’s smart for businesses to institute a segregation of duties. This separates the check writing and account reconciliation functions in the business so the person writing checks is not also in control over balancing bank statements. That simply gives one individual too much access and power to commit a crime. 

How the law works to prosecute check fraud

Before charging a person with a crime for writing a bad check, several things must happen. First, the merchant account holder or bank that cashed the bad check must send the writer of the check five-day’s notice. This is a warning that he or she has bounced a check and that payment – including reimbursing the merchant or bank for the returned check fee associated with the bad check – is needed within five business days.

If that doesn’t work, some businesses will make a second attempt. The FI will take the check to the police, along with proof that they’ve already tried to collect on it. The police then will send out a 10 day’s notice letter. This alerts the perpetrator that failure to make good on the debt will result in the involvement of the prosecutor’s office. Authorities say most cases don’t go beyond these two preliminary stages.

How TrueChecks interdicts bad checks

The law makes it a crime to knowingly write a check for which there is insufficient funds in the bank. That’s why running all checks through TrueChecks® to verify the account status and look for any alerts is a great prevention method for these bad checks.

The crime of knowingly writing a check against an account with insufficient funds is a misdemeanor if the amount of the check is less than $500. If the amount exceeds that amount, it jumps to a two-year felony.

Again, in this situation TrueChecks® would keep records of the dates, account numbers, and a full scan of the check in the system so that the bank has the record of these bad check attempts to help you in court. Contributing this important data back is an important part of being an AFS customer. It is also a major reason why the database contains so much current and comprehensive information.

Another type of “bad check” is a “no-account” check. Those are checks written on accounts that either don’t exist or have been closed. Those cases automatically jump to the felony level. According to PetoskeyNews.com, “Prosecutors say the number of bad check cases for which they are authorizing charges seems to be on the increase. And while they can’t say for sure, it could be a case of tough economic times leaving a greater percentage of bad check passers unable to make good on their debt before the case goes to court.”

Use these tips to tackle check fraud head-on. Make sure that staff handling incoming check deposits run them through TrueChecks® or TrueChecks® Batch. Fighting fraud starts with prevention! We also help fight ACH fraud.

Not an Advanced Fraud Solutions customer yet? Request a free demo and ROI analysis now!

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  • Who We Work With
    • Credit Unions
    • Banks
    • Partners
  • Solutions
    • TrueChecks®
    • TrueCards®
    • Positive Pay by AFS
    • TrueACH® with Account Validation
  • Insights
  • Resources
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    • Articles
    • White Papers
    • Webinars
  • About AFS
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