#OrboIntelligence Check Fraud Resource Hub
Your centralized resource for primary and secondary research, industry trends, and 3rd party reports.
Welcome to the #OrboIntelligence Check Fraud Resource Hub
Over the past 3 years, the banking industry has seen a meteoric increase in check fraud -- even with a decrease in check volumes. Traditionally the industry relied on the ABA Deposit Account Fraud Survey as the primary resource for data and trends on check fraud. However, today there are a wider range of resources available with a new report being published virtually every month.
To better serve the industry, OrboGraph not only executes its own research, but is taking a leading role in consolidating these materials into a centralized hub. In the fight against check fraud, the more information that is readily available, the better outcomes we as an industry can achieve.
We hope you find this hub to be beneficial. Please email marketing@orbograph.com if you would like to suggest/add additional resources or reports.
Auriemma Bank Fraud Control
In an interview with Frank McKenna of the Frank on Frank blog, Troy Huth, Director of Bank Fraud Control at Auriemma, shared some shocking research data: Check Deposit Fraud is up a whopping 385% in 2022 -- exceeding the industry belief that check fraud has increased 3X from pre-pandemic levels.
The company collected benchmarking data from 2021 and 2022 and calculated each year’s total check deposit fraud rate. The check deposit fraud rate is measured as total check deposit losses divided by total check deposit transaction dollars.
Source: Frank on Fraud Blog
Abrigo -- Check Fraud White Papers
Check Fraud: New Tech Driving Old School Scam
The Dark Web: An Online Market for Stolen Checks
NICE Actimize: Attempted Check Fraud Up +171% in 2022
The 2023 NICE Actimize Fraud Insights Report entitled Check Fraud Running Rampant in 2023 shows a significant spike in check fraud that correlates to first-party deposit fraud. In this scenario, bad actors are opening bogus bank accounts for the sole purpose to defraud the bank. This is done by depositing forged or counterfeit check items into accounts, then depleting the accounts before the funds are reversed.
An even more alarming scenario is consumers falling victim to scams: They receive fraudulent checks from fraudsters, deposit the items into their accounts and are told to keep some, but send a majority to the fraudster. The fraudulent funds are later returned, leaving accounts in overdraft. Typically, these funds are charged off by financial institutions.
Thomson Reuters -- Suspicious Activity Reports Surge: 2023 Filings Expected to Set Another Record
According to the Thomson Reuters Regulatory Intelligence special report based on analysis of public data released by the U.S. Treasury Department’s anti-money laundering (AML) unit, FinCEN, there has been a significant increase in SARs (Suspicious Activity Reports) recorded in 2022.
The report shows that SARs filings soared in virtually all categories -- with particularly massive spikes in human exploitation, elder fraud, and government-related benefit scams are noteworthy. Such vulnerable populations have grown in both size and susceptibility, especially among migrants and the elderly.
As noted on page 23 of the report:
"Check fraud, was by far the most prevalent fraud type reported in 2022, with over 680,000 SAR filings. It was the second largest of all SAR categories that year. While firms have responded by reinforcing their anti-fraud organizations overall, they have focused particular attention on check fraud. While firms have responded by reinforcing their anti-fraud organizations overall, they have focused particular attention on check fraud."
According to Reuters, we're seeing a continued surge in Q1 of 2023 as check fraud related SARs exceeded 185K.
BlueVoyant: Checking Out: How Cyber Threat Actors Use Physical Checks to Commit Fraud
Over the past year, BlueVoyant has observed a significant spike in the trade of compromised and fraudulent checks on the deep and dark web. Threat actors steal checks from the mail or create counterfeit versions that are virtually indecipherable from authentic ones, selling them on cybercrime forums at great profit or using them to deposit significant amounts of money into their own accounts.
Aite-Novarica: Fraud Trends for 2023 and Beyond: Everything Old is New Again
Fraud Trends for 2023 and Beyond: Everything Old is New Again is Aite-Novarica Group's latest research report, surveying 34 U.S. fraud executives who attended Aite-Novarica Group’s Financial Crime Forum in September 2022 in order to better understand the current and future environment for fraud trends.
InfoSecurity Risk: FraudToday.io Check Fraud Series
Check Fraud: What Hurdles
Are Facing Banks?
Georgia State's David Maimon on Why Banks Have Not Been
Able to Tackle Check Fraud
New Tools and Integration Are
Detecting Check Fraud Faster
Trace Fooshee of Aite-Novarica on
Detecting Fraud With Image Analysis Solutions
Source: FraudToday.io
Source: FraudToday.io
InfoSecurity Risk: FraudToday.io Check Fraud Series
Check Fraud: What Hurdles
Are Facing Banks?
Georgia State's David Maimon on Why Banks Have Not Been
Able to Tackle Check Fraud
New Tools and Integration Are
Detecting Check Fraud Faster
Trace Fooshee of Aite-Novarica on
Detecting Fraud With Image Analysis Solutions
Source: FraudToday.io
Source: FraudToday.io
BAI: The State of Fraud in Financial Services
- Check fraud still ranks among the top fraud in both 1st and 3rd party fraud
- Check fraud is ranked 5th in reported fraud by customers
- Frank McKenna, the Co-Founder and Chief Fraud Strategist for PointPredictive, notes that a potentially $1.2B that is not reported to banks.
BAI Executive Report: Finding an edge in fraud’s cat-and-mouse game
This BAI Executive Report examines where things stand with fraud protection and how it can be done more efficiently and effectively, including looking at the role of both humans and technology in fraud prevention strategies.
Topics Include:
- The art and science of fraud prevention
- Deposit accounts in the fraud crosshairs
- Banks need to be ready for better deep fakes
- Fraud detection is faster, yet still too slow
- Striking a balance between fraud and friction
- Managing the risks and rewards of faster payments
- Mitigating the challenges of "piggybacking"
- Protection from check fraud in a digital world
Click here to download the report.
2022 NICE Actimize Fraud Insights Report
NICE Actimize notes that they experienced an increase of 8% in check transaction volumes in 2021 and an increase of 106% in attempted fraud dollar value or checks in 2021.
2020 ABA Deposit Account Fraud Survey
The 2020 ABA Deposit Account Fraud Survey collects baseline information on check, debit card, and electronic payment fraud losses, and the actions taken by banks to reduce these losses. This bi-annual study is regarded as a major resource for check fraud.
Click here to download the report.
PwC’s Global Economic Crime and Fraud Survey 2022
PwC's Global Economic Crime and Fraud Survey 2022 respondents reported total losses of US$42B, on top of the damage to brand, reputation and market share.
Exploration of Check Fraud in 2020
OrboGraph's Exploration of Check Fraud in 2020 is a compendium of data gathered from a short, focused survey which was designed to "take a snapshot” of check fraud trends for 2020.
This survey was delivered to financial institutions that include small community, regional, and large US banks. We designed questions to identify trends involving check fraud attempts and losses for both on-us and deposit fraud. Each question was tabulated with overall totals as well as cross-tabulated by size of organization.
Conclusions:
- On-us check fraud attempts: significant increase
- Deposit check fraud attempts: modest-to-significant increase
- On-us check fraud losses: low-to-modest increase
- Community banks seeing stable or reduction in losses
- 5-20B and 21-100B seeing modest increases
- Deposit check fraud losses: modest increase
- Community banks seeing stable or reduction in losses
- 5-20B and 21-100B seeing modest increases
- Community bank responses are generally experiencing less fraud attempts then mid to large banks
2022 Gartner® Market Guide for Online Fraud Detection
As online fraud detection grows beyond traditional use cases, what qualities should security and risk management leaders look out for in a solution? Get key recommendations for navigating the online fraud detection market from Gartner Research.
Read the Market Guide to learn:
- Why businesses should favor vendors with global networks for effective fraud detection
- How to derive more value from online fraud detection solutions
- What key developments are expected in the online fraud detection market
Click here to download the report.
IDology: The Cost of Fraud: B2B Payments Experience 10% Increase During the Pandemic
- 69% of companies reported an increase in year over year fraud attempts
- This is an increase of 53% compared to the prior year
- Only 14% reported a decrease in fraud attempts
- 18% reported that it stayed the same
2021 AFP® Payments Fraud and Control Report
- In 2021, checks and ACH debits were the payment methods most impacted by fraud activity (66 percent and 37 percent, respectively).
- Sixty-eight percent of organizations were targeted by Business Email Compromise (BEC) in 2021, which is a sharp decrease from last year’s figure of 76 percent and the second lowest figure since AFP began tracking this data.
- Accounts Payable (AP) departments are most susceptible to BEC fraud, 58 percent of respondents report that their AP department was targeted by email scams.
- The majority of organizations (two-thirds) is validating payment beneficiary information either through their vendor/bank or by using an external service
LexisNexis: The True Cost of Fraud Study
- $4.00 in Fraud Costs per $1.00 Fraud Loss
- Fraud costs rise 19.8% since 2019
Source: The True Cost of Fraud
Georgia State University’s Evidence Based Cybersecurity Research Group
- 5,300 stolen checks sold on the dark web from 60 tracked chat rooms
- Estimated $10M to over $30M in Check Fraud Losses Due to Mail Theft
FRAUDWIT - Fraud Education and Satire
FraudWit.com takes an alternative approach to fraud education. With short, quirky, and humorous articles and other content, the site opts to teach using satire. Content is created with two groups in mind; consumers and fraud professionals. Information to consumers is used to prevent victimization while information directed towards anti-fraud professionals is to catalyze the industry and address fraud fighting fatigue (FFF).
Click here to visit FRAUDWIT.
Beat the Heat with Haacke - About-Fraud.com
Frank on Fraud Blog
Highlights from blog:
- Frank McKenna, the Co-Founder and Chief Fraud Strategist for PointPredictive, notes that a potentially $1.2B that is not reported to banks in 2018.
- Mailbox keys are worth up to $7,000 on the dark web -- fueling postal mailbox and carrier robberies
- Armed robbery against postal works has surged 300% from 2018 to 2021
- In the past 2 years, there have been over 2,000 assaults and robberies of postal carriers
Blog posts on check fraud:
- $5 Million Check Fraud Ring Ran Mail Theft Operation
- Fraud Check Washers Hate This Very Ordinary $2 Pen
- Massive Instagram “Cash For Checks” Fraud Ring Busted
- Rise in Fraud Leads To “Open Season” On Mail Carriers
- Check Fraud Now Fueling More Violent Postal Crimes
- Check Fraud Is Booming Again In A Post-Pandemic US
Source: Frank on Fraud Blog
Abrigo Webinar: Check your checks and imposters: Latest fraud trends (2022)
To your knowledge, how large of a percentage is check fraud of total bank account theft?
