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A Decrease in Check Fraud?
Question: With checks being used less, and debit cards and online payments being used more, should we expect to see a significant decrease in check fraud?
Answer: While check volumes are decreasing, check-related losses are still increasing. Yet, the 2007 ABA Deposit Fraud Survey Report highlighted that the industry’s current fraud prevention efforts continue to prevent a significant proportion of the potential loss.
According to the study:
- Industry check-related losses increased to an estimated $969 million in 2006, compared with $677 million in 2003.
- Although the number of fraud cases decreased to 561,306 from 616,469, the average loss per case increased from $1,098 in 2003 to $1,727 in 2006.
- Considering actual losses and loss avoidance due to banks’ prevention strategies, the total amount of attempted check fraud against banks’ deposit accounts reached an estimated $12.2B in 2006. Most of these attempts, 92% or $11.2 B, were caught by the prevention systems or measures before incurring any financial loss to the bank.
Early Warning Systems Boilerplate
For over a decade, Early Warning Services, LLC (formerly Primary Payment
Systems) has been an industry pioneer by facilitating cooperation and
information sharing among financial services organizations as a
best-practice means to help prevent fraud losses and safeguard the financial
assets of those organizations and the consumers they serve. A suite of
services delivers this intelligence to where it is needed most resulting in
billions of dollars in loss avoidance each year.
For more information, please visit www.early-warning.com.
First published on BankersOnline.com 4/21/08
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