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CHECK FRAUD LOSS REPORT - First Quarter 2000

National Summary

TOP FIVE LOSS CATEGORIES (by Number of Accounts)

  1. Return losses excluding closed accounts, NSFs, and stop payment (other return loss reasons) (1)*
  2. Forged maker?s signature (3)
  3. Counterfeit (2)
  4. NSFs (4)
  5. Closed accounts (6)

Last quarter?s rank in parentheses.

  • Check-related losses decreased from $1.12 per transaction account to $0.94 in the first quarter. A year ago, check-related losses totaled $1.26 per transaction account.
  • Compared with the same period a year ago, losses were lower in the Northeast, Southeast, and West, but were higher in the Central and Southwest regions. By type of fraud, lower losses were reported for most categories. The most significant improvement appears to be losses associated with return items.
  • The Central region had the highest losses (at $1.41 per transaction account), followed by the Southwest ($1.18), West ($1.02), Southeast ($0.90), and Northeast ($0.65) regions.
  • ?Other return loss reasons? was the leading loss category in the Central, Southwest, and West regions. In the Northeast and Southeast, the top loss category was counterfeit. A year ago, the leading loss categories included counterfeit (the Northeast) and ?other return loss reasons? (all other regions).
  • Combining all > New account losses amounted to $0.19 per transaction account or $6.04 per new account opened, compared with $0.31 and $8.01, respectively in the fourth quarter, and $0.38 and $8.70, respectively, a year ago. Except for the West, all regions reported a decrease in new account losses in the first quarter. The West experienced an increase in new account losses per new account opened.
  • Nationally, 20 percent of fraud losses were associated with new accounts, a substantial improvement from the 30 percent in the first quarter 1999. By region, losses attributed to new accounts ranged from 7 percent in the Central region to 25 percent in the West.

Survey results reveal that losses associated with true name fraud appear to be rising, particularly in the Northeast.

Excerpted from SAR Activity Review October 2000 Issue , page 29

First published on 10/01/2000

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