Check Fraud—Are You Protected?

Attempted check fraud at the nation's banks rose to $5.5 billion in 2003, according to the latest Deposit Account Fraud Survey Report from the American Bankers Association.

While attempted check fraud continued to rise, actual dollar losses remained somewhat stable at $677 million, down slightly from the $698 million that banks lost in 2001. Industry experts are crediting banks' check fraud prevention systems with keeping actual losses significantly lower than the attempted fraud numbers.

Currently, the majority of US banks rely on manual fraud protection via visual scans of the front and back of checks written over a pre-determined threshold. This system has proved inadequate and at times expensive over the years. Now we have better, more accurate and efficient fraud prevention tools.

For example, assume a bank using manual fraud detection processes 10,000 items a day and reviews all items greater than $5,000. If the bank reviews 40 large-dollar items per day and spends three minutes verifying each check, that institution will spend two hours per day on manual fraud detection. With automated image-based fraud detection, several hundred items a day can be reviewed, which means the institution could review all items in excess of $1,000, providing themselves more comprehensive and cost-effective fraud protection.

Review more checks in less time
With numbers such as reported in the ABA study, it's imperative for financial organizations to protect themselves. Fortunately, our imaging solutions provide clients new fraud tools to protect themselves and customers. Today, Open Solutions' fraud solutions can verify signatures, check stock and CAR/LAR information in seconds, allowing you to increase the number of checks reviewed without additional overhead expenses.