More U.S. consumers than ever are swiping and tapping to check their bank account balance, to transfer money or deposit a check. The result has been a mobile banking boom. To keep up with demand, banks and credit unions have been fast to develop their own apps and mobile-friendly services. These services include enhancing ATMs with the latest remote deposit check imaging capabilities.
As with any new payment technology, fraud is quick to find new opportunities and loopholes. Check fraud has done more than just stick around. Check fraud has evolved to exploit these newer remote deposit capture (RDC) channels. According to the Association for Financial Professionals 2019 AFP Payments Fraud and Control Survey, which surveyed over 600 treasury and finance participants, “checks continue to be the subject of more fraud than any other payment method, with 74 percent of respondents reporting this form of attack.”
Remote deposit check scam example
The reason check fraud remains so relevant is because of how easy and effective it is to perpetrate.
For example, a scam involving RDC could be as simple as a duplicate deposit scam. In this example, a remote deposit is made with a mobile device.
Then, the same check is walked into a bank and cashed. FIs who don’t have the bandwidth to audit every check (instead choosing to prioritize only high-value items), or validate checks in real-time or via a comprehensive database, are at serious risk of being defrauded.
FIs can mitigate check fraud, including remote deposit fraud, across all deposit channels with these best practices:
Have accurate, current data with real-time updates to your remote capture system.
Up-to-the-minute data updates provide a real-time and clear picture of whether the account has a history of fraudulent activity at the time of the mobile transaction. Providing visibility with accurate, real-time data from historical transactions removes any fuzziness about the validity of the mobile deposit. The system you use must be able to provide a real-time data feed. This includes counterfeit, NSF, Closed Account, Duplicate and other fraudulent items.
Be sure your real-time alerting systems come with data aggregation and automation.
Real-time alerts for your fraud team starts with work-flow automation. But you must first implement a system that consolidates data from multiple mobile-deposit capture and check image processing platforms. Data aggregation with fraud visibility provides a mechanism for your fraud team to detect, in real time, the validity of a mobile deposit.
Take a proactive stand against mobile deposit fraud with better data and visibility.
Data quality should be at the heart of your remote capture fraud system. If you are going to minimize remote capture fraud it is imperative. A mobile scammer will stay a step ahead of your fraud team by hitting multiple FIs in one morning/afternoon. Most FIs do not have a full understanding of the remote deposit risk because they don’t have the data to give them the visibility to see the magnitude of the problem, resulting in an inability to fight what they cannot see. Real-time updates to your backend database with alerting functions for your fraud team are critical to taking a proactive stand against remote capture fraud.
