FOX Business | With check fraud on the rise, new AI-powered platform helps banks fight back
By Breck Dumas, FOX Business
While it has become unusual to see someone write a check at the grocery store these days as credit and debit cards have become widely adopted, checks are still a commonly used form of payment, and check fraud has exploded in recent years.
The U.S. Treasury’s investigative arm, the Financial Crimes Enforcement Network (FinCEN), reported last year that reports of check fraud in 2022 exceeded 680,000, nearly doubling the number of filings the prior year.
“The battle against check fraud is a race against evolving criminal tactics,” said Datos Insights strategic adviser Becki LaPorte. “Fraudsters use this to their advantage and wield sophisticated tools. It is imperative for community financial institutions to adopt innovative technology solutions that protect customer funds without impacting the customer experience.”
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The methods scammers use to acquire a check can vary from stealing checks through normal day-to-day commerce, stealing check payments from the mail or even obtaining customer credentials through phishing scams that may allow them to review check images online and create a counterfeit copy of a consumer’s check.
As banks and credit unions scramble to combat the crime, financial crime prevention firm Abrigo has rolled out an artificial fraud detection platform for institutions that fights fire with fire as fraudsters have become more sophisticated in the digital age.
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Abrigo’s AI platform uses step-up authentication capabilities to pinpoint a higher rate of altered items, forgeries and fraudulent checks. The company says it is able to tailor the new tool to institutions’ needs, automate processes and streamline workflows to increase efficiency and prioritize higher-risk activities.
“Community financial institutions have been dealing with tight margins since mid-2022,” Abrigo CEO Jay Blandford told FOX Business. “Fraud adds to this margin pressure and negatively impacts reputation and customer experience. Despite rising fraud losses, financial institutions have indicated in Abrigo polls that they have limited ability to dedicate staff and resources to prioritize check fraud defenses.”
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