The Check Fraud Revival: Understanding Vulnerabilities and Defenses

Check fraud is back with a vengeance and continues to worsen as the industry looks for new approaches and solutions to counter the increased threat.

With the rise of digital payment methods and the focus on increased online security measures redirecting potential investment in check fraud detection, the U.S. has seen a surge in check fraud as the pandemic waned, stimulus programs began drying up, and fraudsters turned their attention back to the financial sector. As the rate of check fraud has grown, so too have FIs’ losses and their challenges with managing what is easily the most labor-intensive alert and investigation process in fraud management operations.

This report provides an overview of check fraud types and the related control frameworks that FIs utilize to detect fraudulent check items and prevent related losses. It is based on Datos Insights’ ongoing industry research on financial service industry trends with insights from a survey of 34 U.S. fraud executives who attended Datos Insight’s Financial Crime and Cybersecurity Forum in September 2022.

Clients of Datos Insights’ Fraud & AML service can download this report.

This report mentions Carreker, DataVisor, and Featurespace.

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