As Fraud Evolves, Wisconsin Banks Respond
By Katie Reiser
In the July/August issue of Wisconsin Banker, we shared information from presenters at the WBA’s first Fraud Summit held in June. We now turn to Scott Birrenkott, WBA director – legal, and three members of WBA’s Financial Crimes Committee for their fraud fighting insights.
As much as the fraud landscape evolves, some things never change. While criminals now employ artificial intelligence and deepfakes to trick their victims, long-standing schemes like check fraud remain stubbornly persistent. Particularly concerning is the rise of bank impersonation/spoofing which WBA President and CEO Rose Oswald Poels recently addressed in an Executive Letter and a press release which was picked up by many media outlets.
“Check fraud is one the biggest challenges right now,” said attorney Birrenkott, who also serves as staff liaison for the association’s Financial Crimes Committee. “Additionally, banks are not only battling check fraud, but also electronic payments fraud and new accounts fraud.”
For banks, the challenge is twofold: fighting fraud while continuing to serve customers and build trust. “Fraud targets both consumers and businesses,” Birrenkott added. “Criminals spoof individuals, create fictitious people or companies, or compromise existing accounts. Prevention is ideal, but it’s difficult — banks have to think about both prevention and how they’ll respond once fraud occurs.”
New Faces of Fraud and Classic Scams
Emerging schemes increasingly leverage technology to appear more legitimate. AI-driven voice spoofing, deep-fake impersonations, and business email compromise are giving fraudsters powerful new tools.
Mike Christensen, deposit compliance and operations officer at Farmers Savings Bank in Mineral Point, said a common trend is what he calls “shock and awe” tactics. “Fraudsters will text or call reporting fake transaction alerts, bank embezzlement, or even criminal investigations to get the victim’s attention.
The criminals work together as a team — one poses as law enforcement, another as a bank representative, another as a government agency. The victim, eager to help resolve the issue, often ends up handing over money or gift cards.”
At Fortifi Bank, Chief Risk Officer Theresa Weckwerth has seen a rise in imposter scams. “Criminals are calling and texting clients while pretending to be from trusted organizations, including their bank’s fraud department or law enforcement, in an effort to obtain credentials to the client’s online banking.”
But, despite all the new technology, some scams endure.
“The most common type of fraud we continue to encounter is check fraud — specifically altered checks intercepted from the mail,” said Jennifer Haydon, CAMS, vice president and compliance officer at American National Bank Fox Cities. “These checks are legitimate, but they’ve been washed or changed after being issued. We also see business email compromise involving ACH rerouting or demographic changes intended to facilitate fraud, and a recent increase in check kiting, driven in part by increasing costs and financial pressures on individuals.”
Christensen said fraudsters are refining old tactics. “Whereas they used to work alone, they now work in groups. After hours of talking to multiple ‘experts’ from supposed government agencies, victims feel overwhelmed and confused — which makes them more likely to hand over sensitive information or money.”
Building a Fraud-Savvy Workforce
Bank employees remain the first line of defense. Ongoing training and empowerment are essential.
“Education is paramount,” said Haydon. “Fraud can occur across many platforms, so it’s essential that staff are trained to recognize the warning signs. Teaching employees to ask questions, dig deeper, and investigate unusual requests is often all it takes to uncover a fraudulent attempt.”
Christensen noted that training must be both formal and ongoing. “Each year, we hold in-person fraud training using real examples of recent attempts. Throughout the year, we supplement that with online meetings focused on different fraud scenarios. I’m very proud of our staff for following procedures and knowing how to handle red flag situations to protect our customers and the bank.”
Birrenkott agreed that frontline empowerment is key: “If a teller notices a customer acting strangely, withdrawing unusually large sums, or presenting a suspicious check, they should have the confidence, tools, and authority to respond — whether that means asking questions, involving a manager, or refusing the transaction. Once the bank accepts a fraudulent check, it becomes much harder to address the situation.”
Birrenkott suggests sharing real-world examples of fraud attempts and ensuring that employees know the bank’s policies for refusing a suspicious check or escalating concerns, stating “Quick huddles, regular updates, and strong communication channels help keep everyone alert.”
Tools, Tech, and Teamwork
Alongside training, banks rely on a mix of technology and collaboration. Fraud monitoring software, transaction alerts, and law enforcement partnerships are crucial. Just as important is industry-wide cooperation to share intelligence and trends before they spread.
Four WBA member banks, AbbyBank, Forward Bank, Northwestern Bank, and Prevail Bank have come together to educate their communities on avoiding common forms of fraud. Since last summer they have been educating their customers and community members through fraud alerts shared with local media.
Many member banks work with local law enforcement to spread the word about fraud by hosting educational sessions that are open to the public on a variety of fraud-related topics. Those partnerships help underscore the gravity of today’s fraud landscape.
It’s now increasingly common to see warning messages on the homepages of banks’ websites. For example, the First Business Bank website shares this message in a prominent spot: Your Security Is Our Top Priority — First Business Bank will never request sensitive information like account numbers, online banking IDs, tax ID or Social Security numbers, passwords, or Personal Identification Numbers (PINs) via unsolicited calls, emails, or texts. Please regard such requests as highly suspicious. For tips on preventing fraud, visit our Security Center.
Protecting Customers While Ensuring a Smooth Banking Experience
Banks are also investing heavily in customer education. “The best approach is to get ahead of it,” said Haydon. “The more we talk about fraud, the less effective it becomes. Awareness helps customers recognize red flags before they’re deceived — sparing them the financial loss or shame that often follows.”
Christensen emphasized the importance of customizable tools: “We offer free, real-time alerts, one-time passcodes, the option to add Trusted Contacts, and comprehensive debit card controls. That way customers can choose the level of security that works best for them.”
Weckwerth said Fortifi Bank integrates fraud education into daily client conversations. “When we ask questions, we remind clients that we want to protect them from fraud. We also provide custom-created materials, fraud brochures distributed at the teller line and drive-up lanes, and free community presentations to raise awareness about common fraud trends.”
Tap Into Reliable Resources
• WBA has many consumer resources available at www.wisbank.com including content created by WBA in addition to resources from federal agencies.
• ABA’s BanksNeverAskThat Campaign includes tips on how to avoid phishing in emails, calls, and text messages, how to videos, a game, a quiz, and downloadable resources. ABA also has social media posts for banks to use. Registration is free for banks regardless of ABA membership status. Registered banks will receive a link to access the social medial campaign materials. The ABA Fraud Contact Directory is another valuable tool.
• ICBA’s Check Fraud resources include guides for banks responding to instances of check fraud claims and an information piece for customers to help them protect against check fraud. ICBA’s Solutions Directory lists service providers in payments, compliance, and security.
• Visit WBA’s online Best Practices Library to access tools and sample affidavits shared by the Financial Crimes Committee. WBA’s Negotiable Instruments Manual is another helpful resource.
• WBA partners with Community Bankers Webinar Network and OnCourse Learning who offer fraud webinars.
A Shared Responsibility
Fraud prevention is a joint effort between banks, customers, regulators, and communities.
“Vigilance and awareness are key,” Birrenkott said. “Everyone in the bank — not just risk or security officers — should know the signs of fraud and how to act.”
“Fraudsters are constantly adapting, and with AI making schemes more sophisticated, banks can’t treat fraud prevention as an occasional task,” Birrenkott added. “It requires constant vigilance and engagement — every day.”
