Financial Fraud & financial compliance

Banks, Credit Unions and other Lenders Combat Financial Fraud

Technical advances and globalization of counterfeit fraud rings provide increasing operational challenges for financial institutions. Financial institutions are exposed to financial fraud in two primary areas: counterfeit identity and counterfeit transactions that can include currency, personal, cashier and travelers checks, money orders and credit cards.

• According the Secret Service, approximately $150 Million of counterfeit money was circulating in the U.S. in 2009.
• Undetected counterfeit money that passed at the point–of–sale rose from $39.2M in 1999 to $62M in 2006.
• A 2009 report on the ‘True Cost of Fraud’ indicated that U.S. businesses lose nearly $110 Billion annually from fraud, of which nearly half, $48 Billion, stems from ID related fraud.
• Of the 110 Billion in losses experienced each year by merchants, Financial Institutions account for ten percent at 11 Billion.

Each entity has unique circumstances and regulatory pressures. On all accounts, financial institutions are hit harder than other industries as individual fraudulent financial transactions can total hundreds of thousands of dollars. Can you afford to ignore this trend? Do you know how much you are losing to transaction and identity fraud today? How can you stop it?

Fraud Fighter™ solutions have helped financial institutions of all types reduce fraud losses while optimizing compliance. In September 2002, Bank of America installed Fraud Fighter product solutions in two–thirds of their banking centers and by April 2003, had saved over $1MM in fraud losses.

In another case designed to demonstrate the efficacy of a recommended solution, a limited trial of Fraud Fighter was conducted with Wells Fargo and the results were staggering: In fewer than 100 branches that participated with the study, results showed that losses from fraud were reduced by more than $200,000 (in just over 30 days). Confidence levels were reached gaining the sponsorship to have this solution adopted and subsequently rolled–out nationwide - an early win was the detection of a fraudulent $180,000 loan transaction that resulted in the breaking of a nationwide fraud ring.

As managers of financial institutions seek to design fraud prevention controls that satisfy not only legal requirements, but also their distinct business needs, it should also be noted that Fraud Fighter solutions can also help you comply with federal ‘Red Flag’ anti–identity theft regulations ratified on November 1st, 2008, Bank Secrecy Act regulations, and Customer Identification Program requirements.