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Bank Fraud - Recovery Vs Loss Avoidance

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I work in bank fraud cases. We have a case management system in which we input all of our fraud cases (forgeries, counterfeit checks, unauthorized check card trans,etc...). We are trying to make a determination as to the difference between "recovery" and "loss avoidance" when it comes to bank fraud. Could you please help with a clear understanding on what determines in which category an item would fall?

A general definition of the line between these two concepts is based on where you place your time and effort. Loss avoidance involves things like training on recognizing fraudulent items, social engineering and other scams, physical security, security awareness, check holds, CIP (yes, CIP) and customer due diligence. Add to these, careful verification of loan application data, controls over appraisal orders, and site visits on the loan side of the bank. All those are designed to help prevent losses.

Recovery involves everything you do after a loss has occurred to get your money back. It can involve relationships with law enforcement, check fraud procedures, interviewing techniques, legal counsel, collection procedures, etc. As you might imagine, there is considerable overlap, and neither list is exhaustive. For example, legal counsel can be involved in loss prevention and in recovery efforts.

First published on 10/19/09

First published on 10/19/2009

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