According to the most recent American Bankers Association Deposit Account Fraud Survey Report, attempted check fraud among the nation’s banks has increased significantly in the past three years. However, thanks to improved bank fraud prevention systems, actual dollars lost increased at a less-dramatic pace.
Return Deposit items, forged signatures and endorsements, and counterfeit checks are the three most common types of check fraud, with counterfeit checks being the fastest growing cause of actual dollars lost.
The following chart compares the results of the 2006 survey with the results of the previous survey conducted in 2003:
| Return Deposit Items | 41% | 38% |
| Forged Signatures/Endorse | 31% | 30% |
| Counterfeit Checks | 15% | 28% |
New account fraud has also been a continuous concern for banks. In comparison with the last ABA survey, new account fraud losses have risen significantly for banks of all sizes. 46 percent of community bank losses in 2006 could be attributed to new account fraud which is an increase from 44 percent in 2003. With all types of fraud combined, the median loss per bank varies:
| Community Banks | $9,994 |
| Mid-Sized Banks | $43,350 |
| Regional Banks | $698,955 |
| Large Banks | $6.7 Million |
Fraud prevention tools have been vital in minimizing the damage as much as possible. Employee training has been the most common practice employed along with new account screening and check imaging software, positive pay and signature verification. The number of resources that banks dedicate to fraud prevention increases with bank size and adds to the expense that banks already incur from check fraud.
The American Bankers Association (ABA) recommends that consumers never give out checking account numbers or information to businesses that are not known as reputable. Shred canceled checks and deposit slips before discarding them, reconcile each month and report any suspicious activity or unauthorized transactions to the bank.
For the full article, click Attempted Check Fraud Doubles.
