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Tag Archive for: Fraud

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Member News, News, Resources

Association Update: New Fraud Summit in June to Address Evolving Threats

By Daryll Lund

Fraud in the financial services industry is constantly evolving, becoming more sophisticated and harder to detect. As fraud risks continue to grow, Wisconsin banks have made it clear that they need more tools, insights, and strategies to stay ahead. In response to these concerns, the Wisconsin Bankers Association (WBA) is introducing a new, one-day Fraud Summit on June 3, 2025, where banking professionals will gather to tackle fraud — one of the most pressing challenges in the industry. This one-day event will explore the latest fraud trends, emerging threats, and innovative strategies to protect financial institutions and their customers.

This event is the result of direct conversations with our members, who have shared their increasing challenges in protecting customers, accounts, and internal systems from fraud. Through this summit, bankers will hear from industry experts on emerging fraud trends, regulatory developments, and best practices for safeguarding their institutions.

WBA remains committed to providing meaningful education and resources that help banks navigate the complexities of today’s financial landscape. The WBA Fraud Summit is just one way we continue to respond to our member’s needs — ensuring Wisconsin banks have access to the latest knowledge and tools to combat fraud effectively.

Other support for members comes from Midwest Bankers Insurance Services (MBIS). MBIS provides assistance and full review of FI Bond and Cyber Liability applications to confirm and discuss internal controls to prevent fraud. MBIS VP of Sales, Jeff Otteson, recommends that banks work closely with their FI Bond and Cyber Liability broker to thoroughly understand the current vulnerabilities and how they can be eliminated with strong internal controls, best practices, and employee training.

More details on the Fraud Summit, including the agenda and speakers, will be shared with members soon. We look forward to offering this new opportunity to help banks stay ahead in the fight against fraud.

For help strengthening your fraud prevention efforts and assessing fraud risk contact Jeff Otteson, MBIS VP of Sales via email at jeffo@mbisllc.com or call 608.217.5219

Lund is WBA executive vice president – chief of staff and president of EBC and MBIS.

May 14, 2025/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Blue-on-Lime-Green.jpg 972 1920 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2025-05-14 08:30:202025-05-14 08:30:20Association Update: New Fraud Summit in June to Address Evolving Threats
Member News, News, Resources

Executive Letter: Staying Ahead Together — New Member Resources on Emerging Industry Issues

From the Desk of Rose Oswald PoelsBy Rose Oswald Poels

Staying ahead of the curve is a constant priority for our industry — and it’s one the Association takes seriously. WBA is committed to evolving alongside you, offering timely programming that addresses the most pressing issues facing Wisconsin’s banks. Your input drives our work, and our latest offerings reflect both your concerns and your need for accessible, relevant resources.

On April 21st, WBA hosted Fraud Trends & Prevention Strategies, a free webinar presented by Paul Benda, Executive Vice President for Risk, Fraud, and Cybersecurity at the American Bankers Association. From the alarming rise in check fraud to the growing impact of artificial intelligence and deepfakes, Benda provided valuable insights and practical approaches to an increasingly complex threat landscape. His real-life example of the ease in which deep fake recordings can be created with the help of AI was chilling.

Not only did Benda trace the history and predict the trajectory of fraud, he shared how banks can stay one step ahead of bad actors by taking advantage of available resources and working cooperatively with other financial institutions. In addition to covering relevant data and best practices, Benda described advocacy efforts to mitigate fraud. In Wisconsin WBA saw several wins on that front in the last session and will continue to push for legislative change to protect customers.

Member feedback has been overwhelmingly positive. If you missed it — or would like your team to review the material — the recording and slides are available for members for the next 30 days. Please email wbaeducation@wisbank.com to request those resources.

Recognizing that fraud remains a top concern, WBA is expanding on this topic with a new WBA Fraud Summit, scheduled for June 3, 2025, in Wisconsin Dells. This in-person event will bring together industry experts and banking professionals to explore trends, share ideas, and identify strategies to strengthen fraud defenses. We hope members of your team will plan to attend. Click here to learn more and register.

Additionally, we are pleased to offer another no-cost educational webinar: Crypto in 2025: What You Need to Know, presented virtually on Thursday, May 8 from 10:00–11:00 a.m. CT. Brian Laverdure, ICBA’s SVP of Digital Assets and Innovation Policy, will provide a clear-eyed perspective of the regulatory outlook, the evolution of stablecoins, and emerging risks associated with crypto-related illicit finance. Click here for more details.

As always, I appreciate your engagement with WBA programs and services. Our education team is focused on delivering programming that meets your needs and supports your bank’s continued success.

April 24, 2025/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2024/12/Executive-Letter-Thumbnail.png 720 1280 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2025-04-24 08:09:332025-04-24 08:09:33Executive Letter: Staying Ahead Together — New Member Resources on Emerging Industry Issues
Community, Member News, News

Four WBA Member Banks Share Fraud Prevention Release: Scammers Are Pretending to Help – But They’re Really Hacking into Your Life

Four WBA member banks: AbbyBank, ForwardBank, Northwestern Bank, and Prevail Bank continue to collaborate to educate their communities on how to prevent common forms of fraud. 

Have you ever gotten a phone call from someone saying there’s a problem with your computer? They might say they’re from Microsoft, Apple, or even your bank. They sound super helpful. But here’s the truth — they’re not here to help. They’re trying to scam you.

These fake “tech support” calls are on the rise, and they can lead to stolen money, locked accounts, and big headaches. That’s why local community banks are warning customers: hang up and don’t click.

Here’s what usually happens:
•  You get a call or pop up on your computer saying something is wrong.
•  The person says they need remote access to fix it.
•  You give them access — and boom! They’re in your system and eventually your bank account.
•  Some even ask you to “refund” money they “accidentally” put in your account.

“These scammers are smooth talkers. They sound kind and professional, which makes people trust them,” said Connie Zuleger, COO at Prevail Bank. “But no real tech support team will ever ask for access to your computer out of the blue.”

Here’s what you can watch for:
•  Pop-ups with scary messages about viruses
•  Phone calls saying there’s a problem with your computer or bank account
•  Anyone asking you to download something or visit a website
•  Requests for your online banking password or for remote access

“If it feels fishy, it probably is,” said Natalyn Jannene, Assistant Vice President of Marketing at AbbyBank. “We tell our customers to slow down, hang up, and call us directly. It’s always safer to double-check.”

At each local bank, teams are trained to watch for unusual transactions. If something doesn’t look right, bankers will reach out to you directly. Many banks also teach customers how to spot scams through workshops, emails, and one-on-one help.

Here’s how you can protect yourself:
1.  Never give control of your device to someone you don’t know.
2.  Don’t share your banking info unless you call the bank yourself.
3.  Talk to someone you trust before sending money.
4.  Call your bank if something feels off. We’re here to help.

Let’s work together to stop tech support scams before they hurt more people.

AbbyBank www.abbybank.com
Forward Bank www.forward.bank
Northwestern Bank www.northwesternbank.com
Prevail Bank www.prevail.bank

April 11, 2025/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Yellow-on-Light-Blue.jpg 972 1921 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2025-04-11 09:43:322025-04-11 09:43:32Four WBA Member Banks Share Fraud Prevention Release: Scammers Are Pretending to Help – But They’re Really Hacking into Your Life
Community, Member News, News

Beware of Gift Card Fraud: A Red Flag for Scams

Gift cards are a convenient way to celebrate special occasions, but they are also a favored tool for fraudsters. When someone asks you to pay for a product, service, or debt with a gift card, it’s a major red flag for fraud.

Fraudsters often pressure victims to purchase gift cards, claiming it’s the quickest way to settle a debt, pay a fine, or avoid legal trouble. Once you share the card numbers and PIN, the scammer drains the funds, and recovering the money becomes nearly impossible.

“I was standing in line at a local retailer behind someone who was requesting a very large amount of their gift cards to make a payment,” stated Chris Mueller, VP / Compliance Officer at Forward Bank. “The service desk staff did their best to persuade them not to send out the cards, and I did my best to help them get this across. It’s not easy to stop this from happening.”

One common scam is the “imposter scam,” where fraudsters pretend to be someone you trust—a government official, family member, or even a tech support representative. They claim an urgent situation, such as unpaid taxes or a loved one in need, then demand immediate payment through gift cards.

According to the Federal Trade Commission (FTC), scammers most commonly requested cards from major retailers like Target, Amazon, and Google Play.

Examples of Known Scams

  1. IRS Impersonation: Fraudsters call pretending to be from the IRS, threatening legal action unless the victim pays back taxes using prepaid gift cards.
  2. Tech Support Scams: A scammer claims your computer has a virus, offering to fix it if you buy gift cards as payment.
  3. Grandparent Scam: An imposter calls, pretending to be a grandchild in trouble, asking for money in the form of gift cards to cover emergency expenses.

“Many of these scams listed are targeting our senior population,” commented Natalyn Jannene, Assistant Vice President of Marketing at AbbyBank. “They are playing on an individuals love for their family members or lack of confidence in technology issues. Family can pull together and watch out for each other to prevent the scam itself or the gift cards from being sent.”

Protect Yourself

If anyone asks for payment via gift cards, it’s almost certainly a scam. Report such instances to the FTC immediately and contact the retailer to see if they can freeze the card’s funds before they’re used. Be skeptical of urgent requests involving gift cards, and always double-check with trusted sources.

Other common scams occurring throughout the year are tech support scams. These could lead to gift cards being requested as payment.

If a caller says your computer has a problem, hang up. A tech support call you don’t expect is a scam —even if the number is local or looks legitimate. These scammers use fake caller ID information to look like local businesses or trusted companies.

If you get a pop-up message on your device to call tech support, ignore it. Some pop-up messages about computer issues are legitimate, but do not call a number or click on a link that appears in a pop-up message warning you of a computer problem.

“By raising awareness, we can help prevent more people from falling victim to this growing form of fraud,” stated Andrew Henning, AVP – Compliance at Northwestern Bank.  “Stay informed, stay vigilant, and protect your money.”

For more information on how to avoid scams, visit the Federal Trade Commission’s Consumer Protection website (https://www.consumer.ftc.gov).

AbbyBank           www.abbybank.com

Forward Bank   www.forward.bank

Northwestern Bank www.northwesternbank.com

Prevail Bank      www.prevail.bank

December 26, 2024/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Lime-Green.jpg 972 1921 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2024-12-26 07:47:172024-12-26 08:29:48Beware of Gift Card Fraud: A Red Flag for Scams
Community, Member News, News

Executive Letter: Four WBA Member Banks Collaborate to Fight Fraud

By Rose Oswald Poels

Four WBA member banks, AbbyBank, Forward Bank, Northwestern Bank, and Prevail Bank have come together to educate their communities on how to prevent common forms of fraud. This underscores a longstanding tradition of Wisconsin banks putting their customers and communities first. WBA serves to support members in collaboration for the benefit of our industry and our state.

It’s inspiring to see that these banks share a commitment to the financial security of their customers, no matter where those customers do their banking.

Conversations between the banks about their fraud education collaboration began this summer. Their initial collaborative release in June was about the increasing threat of text-based fraud. Their most recent release to customers is centered around preventing check related fraud, with a focus on check washing.

In addition to sharing useful tips and strategies, leaders from the four banks share their insights and cautionary examples. Local newspapers have used the information from the banks in an effort to educate and protect community members, and a local TV station covered the first release in a segment on fraud trends.

Kudos to these members for making an impact in their communities! As fraudsters continue to get bolder and savvier, it’s heartening that these banks are collaborating to keep their customers informed and aware.

This summer I shared resources to fight check fraud and it’s worth re-sharing that information since fraud, in its many forms, continues its insidious growth. As I stated this summer, the volume of check fraud that is occurring is astounding considering overall check usage is decreasing. There are many check fraud resources available from WBA and others; I thought it would be helpful to gather them together so you and your staff can more easily locate them.

The following is a listing of resources that are meant to help educate staff on the rules applicable to check negotiation, identify where liability may lie regarding a fraudulent instrument, and directories meant to help banks handle check fraud claims more efficiently.

Directories:
•   ABA online directory of contact information for banks that need to file a check warranty breach claim with another financial institution. It is searchable by bank name, city, state, or FDIC number, so banks can find the right contact at the institution to help resolve a warranty breach claim. The directory is available to ABA members and non-members.
•   ICBA’s Solutions Directory to identify payments, compliance, and security service providers.
•   Nacha’s ACH Contact Registry for banks needing a check contact at a counterparty.

Education-Related Resources:
•   Webinar: Check Breach of Warranty Blues
•   Webinar: Avoiding Check Fraud Liability: From Prevention to Loss Allocation
•   ICBA Check Fraud: A Practical Guide to Altered, Forged, and Counterfeit Checks for Community Bankers
•   2023 WBA Negotiable Instruments Manual, UCC Rules Regarding Bank Liability and Responsibility for Wisconsin Banks
•   WBA is your bank’s local training provider for ABA online training. The recently revised 30-minute Fraud Prevention course can be assigned to staff for $55/registrant. Interested in enrolling a group of 15 or more? Contact wbaeducation@wisbank.com for further discounting options.

WBA Best Practices Library
To further assist banks, various affidavits have been created and/or shared by the WBA Financial Crimes Committee and may be found in the Security/Financial Crimes folder within the WBA Best Practices Library. The Library may be found on the “News and Resources” section of the WBA website. The WBA Best Practices Library is password protected; should you need the password feel free to contact WBA Legal at wbalegal@wisbank.com for the password.

Wisconsin Banker article
In addition to the resources listed above, an article on check fraud in the July/August issue of Wisconsin Banker included insights and expertise from members of WBA’s Financial Crimes Committee, the Financial Crime Investigators group, and detectives from the Dane County Sheriff’s Office.

September 26, 2024/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Yellow-on-Light-Blue.jpg 972 1921 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2024-09-26 08:06:142024-09-26 08:06:14Executive Letter: Four WBA Member Banks Collaborate to Fight Fraud
News

Check Use Down, But Check Fraud on the Rise

By Katie Reiser

Despite the global shift away from checks to other forms of noncash payments, check fraud is surging. The Federal Reserve’s annual “Diary of Consumer Payment Choice” revealed that consumers used checks for only 3% of payments. Yet the Financial Crimes Enforcement Network (FinCEN) reported a staggering increase in check fraud with over 680,000 suspicious activity reports (SARs) filed in 2022 — up from 350,000 in 2021.

Scott Birrenkott, Wisconsin Bankers Association (WBA) director – legal and staff liaison for the WBA Financial Crimes Committee, noted a substantial rise in member inquiries about check fraud, indicating an escalating concern within the banking community. “It’s one of the most frequent calls we get, and it’s risen quite significantly to the point where we’re getting several calls a week on the topic,” Birrenkott said.

Growth During the Pandemic

The U.S. Department of Treasury reported that check fraud has increased nationwide by 385% since the pandemic. Check fraud spiked during the pandemic partly due to the widespread mailing of government relief checks. Criminals exploited the overwhelmed U.S. Postal Service (USPS), with FinCEN reporting a huge surge in mail-targeted fraud. FinCEN and the U.S. Postal Inspection Service (USPIS) joined forces to identify red flags to help financial institutions detect, prevent, and report suspicious activity connected to mail theft-related check fraud.

Birrenkott also noted fraudsters grew bolder in general during the pandemic, stating that, “during the pandemic, there was a lot more online activity, and fraudsters pursued ways that they could exploit this fact, a trend which has continued.”

Mail Fraud Flourishes

Mail theft, particularly involving the theft and misappropriation of USPS “arrow keys” — the master keys that open USPS blue collection boxes — has become rampant. The USPS has even warned against mailing checks, advising that if you must mail checks, drop them off at a Post Office.

Dave Oldenburg, vice president of financial investigations at Tri City National Bank and vice-chair of the WBA Financial Crimes Committee, stressed how easily criminals can access mail and commit fraud. “Things that we once thought were safe, like the blue U.S. Post Office receptacles, no longer are. We’re now looking at an epidemic of those stolen arrow keys, which allows the fraudsters the perfect opportunity to get into the mail, where they start rummaging around,” Oldenburg said.

Detectives Gwen Ruppert and Michelle Viney of the Dane County Sheriff’s Office are veteran fraud investigators who often advise community groups and businesses on fraud prevention. “Don’t put payments in your mailbox at the end of the driveway or on the outside of your building. Take them to the Post Office or use a P.O. box number, so that mail doesn’t sit in your mailbox,” Viney advised. She also cautioned businesses against leaving outgoing mail in accessible areas like office lobbies and strongly recommends treating all business mail as if it contains cash.

Impact of Technology

Technological advancements have made check fraud easier to commit. Debby Bartolerio, chief operating officer at First Citizens State Bank and WBA Financial Crimes Committee member, recalled simpler times when fraudulent checks were harder to produce. “When I was a teller in the 1980s, we learned to look for drawn signatures because photocopies and facsimile signatures weren’t a thing. Now with color copiers, scanners, and checks being moved via image instead of physically transported back and forth, we really don’t have any good way of telling if a check is authentic,” Bartolerio said.

Detective Ruppert echoed this sentiment, explaining how the internet and increased computer access have facilitated check washing, allowing fraudsters to alter checks easily. “People can now smoothly take out the payee or the amount and then easily just reprint your check, and it looks like the original signature,” Ruppert explained. She added that matching check stock can be easily found online, making it simpler for criminals to create legitimate-looking checks.

Oldenburg also noted the relative simplicity of check washing. “They’ll just take that routing number and the account number, get basic check stock at Office Depot, and then give those counterfeit checks to various runners who open accounts at financial institutions,” he said.

Business Accounts at Higher Risk

Business accounts are prime targets for check fraud due to their higher transaction volumes, larger check amounts, and heftier account balances. Birrenkott emphasized the importance of using bank-provided fraud protection tools such as positive pay, fraud protection software, and fraud alerts.

“We see the most significant check fraud on the business side,” Birrenkott said. “That’s not to say there isn’t consumer check fraud, but what we most commonly see is that somebody will get a hold of a business’s checks, fraudulently represent themselves as the business, and start cashing items as though they’re that business.”

Importance of Vigilance and Customer Education

Oldenburg stressed the necessity of businesses reconciling their accounts daily. Proactive monitoring can prevent fraud from escalating. “There’s nothing worse than a situation where the business may not have looked at that check and it’s been five or six days,” he said. “Gone are the days of reconciling your accounts monthly. Customers should be in the habit of reconciling their accounts daily; partnering with their financial institution to make sure that if something is wrong, it can be corrected and that check can be returned.”

Positive pay is a highly effective tool, but Oldenburg warned that fraudsters are becoming increasingly sophisticated. “Fraudsters continue to be savvier, so in conjunction with the service, we recommend that they still reconcile the accounts,” he said. Oldenburg described business impersonation tactics where bad actors create counterfeit checks payable to similarly named businesses, which are fraudulently registered with the Wisconsin Department of Financial Institutions to avoid detection. Vigilant monitoring, particularly of new and unfamiliar endorsements by regular customers, is crucial to detecting and combating these tactics.

Empower Staff and Assure Customers

Ruppert highlighted the importance of frontline staff asking for ID and verifying customers’ identities despite potential discomfort. “I know it feels bad for someone to ask a customer standing in front of them or someone who purports to be the customer, for ID. But it’s important to make sure it’s a legitimate Wisconsin ID, compare the picture and make sure it’s actually that person,” she said.

Ruppert and Viney have countless examples of criminals using IDs stolen from cars and homes with the goal of using those IDs to commit financial fraud. Criminals will recruit a “money mule” (often a homeless or indigent person) who may vaguely look like the photo on the ID and instruct them to negotiate the check at a financial institution.

When financial institutions are clear about Know Your Customer (KYC) protocol to employees and empower frontline staff to ask questions, Ruppert shared, “you’re actually helping to protect your client.” Customers may not always see it that way and can find questioning annoying and intrusive. However, educating customers about the risks of fraud and the reasons behind security measures can help them understand the necessity of these precautions. “It’s to protect them, their finances, and all of their neighbors who are also falling victim,” Ruppert pointed out.

Collaborate, Communicate, and Educate

Fraud-fighting groups like Financial Crimes Investigators (FCI) in South Central Wisconsin and Wisconsin Association of Fraud Investigators (WAFI) in the Milwaukee area, and IAFCI at the international level, provide forums for financial institutions, government agencies, and law enforcement to share alerts and best practices. Jack Femyer, executive director of FCI, praised the value of information sharing in preventing fraud. “I think one of the best things for banks is our alerts which notify banks of potential fraud and theft attempts by bad actors in the area or state to help minimize loss,” Femyer said.

“Fraud prevention is all about information and teamwork,” echoed Birrenkott. In addition to timely email alerts, FCI meets in person every other month, inviting speakers to share strategies and best practices.

Oldenburg stressed the value of participation in anti-fraud groups and involvement with WBA, noting that there is always something new to learn. The WBA Financial Crimes Committee has worked diligently with WBA staff to create helpful resources for fraud prevention, available in the Best Practices Library on the WBA website, wisbank.com. “I encourage financials to be involved because there’s just a lot of knowledge that comes to the table,” Oldenburg said.

When Other Banks Call, Answer

WBA President and CEO Rose Oswald Poels recently shared a comprehensive list of available resources to fight check fraud with members. In her Executive Letter, she noted that check fraud is top of mind for banks across the state. Oswald Poels pointed out that it can be frustrating when another bank in the chain is not responding in a timely fashion. Bartolerio and Oldenburg also stress the importance of helping fellow bankers.

“If you get that phone call, respond to the questions because we’re in this together to stop the fraudsters from getting the money. Working together is the only way we’re going do that,” said Bartolerio, who went on to add, “knowing the other security officers at local smaller community banks is helpful. And if you do get someone that’s helpful at a big bank, be sure to keep their name and phone number because you might not get that same person again.” Bartolerio also finds the American Bankers Association’s Check Fraud Claim Directory useful.

Oldenburg said, “I really encourage people that if somebody calls and they have a fraud problem to be receptive to that.”

Reassuring Victims

Victims of fraud often feel embarrassed and isolated. Victims overcome by shame may not realize how prevalent fraud is. That embarrassment can cause victims to isolate themselves. However, sharing that information may prevent a neighbor, friend, or family member from being the next victim.

Sharing experiences can help prevent others from becoming victims. “We don’t want people to feel bad about this because [the criminals] are very practiced; they’re making their living on it and unquestionably [this fraud] is supporting small governments and terrorist organizations in Africa and the Eurasian continent, with some of this money going to cartels in Mexico,” Ruppert said.

Fighting Fraud Together

Despite the rise of fraud, the industry is prepared to stay one step ahead of the fraudsters. “It’s important to stay on top of fraud trends, and always remain vigilant,” Birrenkott offered. “Take advantage of tools, resources, and technologies where available. Provide information and tips to your customers. The more likely they, and staff, can spot fraud, the more likely you’ll be able to stop it.”

 

FinCEN, in coordination with USPIS, has identified red flags to help financial institutions detect, prevent, and report suspicious activity connected to mail theft-related check fraud, many of which overlap with red flags for check fraud in general.

  • Non-characteristic large withdrawals on a customer’s account via check to a new payee.
  • Customer complains of a check or checks stolen from the mail and then deposited into an unknown account.
  • Customer complains that a check they mailed was never received by the intended recipient.
  • Checks used to withdraw funds from a customer’s account appear to be of a noticeably different check stock than check stock used by the issuing bank and check stock used for known, legitimate transactions.
  • Existing customer with no history of check deposits has new sudden check deposits and withdrawal or transfer of funds.
  • Non-characteristic, sudden, abnormal deposit of checks, often electronically, followed by rapid withdrawal or transfer of funds.
  • Examination of suspect checks reveals faded handwriting underneath darker handwriting, giving the appearance that the original handwriting has been overwritten.
  • Suspect accounts may have indicators of other suspicious activity, such as pandemic-related fraud.
  • New customer opens an account that is seemingly used only for the deposit of checks followed by frequent withdrawals and transfer of funds.
  • A non-customer who is attempting to cash a large check or multiple large checks in-person and, when questioned by the financial institution, provides an explanation that is suspicious or potentially indicative of money mule activity.
July 8, 2024/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Lime-Green.jpg 972 1921 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2024-07-08 08:11:592024-07-08 08:11:59Check Use Down, But Check Fraud on the Rise
News

Detectives Warn: Be on the Lookout for Scam Victims Who Are Constantly on Phone at Bank

The Wisconsin Bankers Association (WBA) interviewed Detectives Gwen Ruppert and Michelle Viney from the Dane County Sheriff’s Office for an upcoming article on check fraud in the July/August issue of Wisconsin Banker. These experienced fraud investigators also shared some tips for frontline staff to spot potential fraud victims at the bank.

Both detectives emphasized that a big red flag which law enforcement hopes bank employees will detect is that victims are often constantly on or consulting their phones when being forced by scammers to authorize large transactions in person.

Detective Viney explained that your customers may have been pressured to visit the branch to withdraw large sums of money and added, “customers are almost always being told to lie to bankers about that transaction.” A typical scenario, part of a growing trend of  government agency imposter scams, might be that a victim is contacted by a person claiming to be with the Social Security Administration who alleges the victim’s Social Security number has been compromised and is being used for nefarious purposes. The victim is convinced they will be held accountable, or worse be arrested if they don’t go to their bank to move their money to a “protected” account.

Fraudsters let victims know that bank employees may ask questions about the transaction and then coach victims to produce reasons for the large withdrawal like the purchase of a vehicle or property.

Bad actors will prep victims prior to the bank visit and guide them throughout the transaction by coaching them on the phone. Detective Ruppert added, “the scammer is telling them they need to make sure the transaction goes through and may claim the call is being recorded to make sure the victim isn’t behind the alleged nefarious activities.”

Unfortunately, fraudsters are too often able to convince victims that they are helping protect them by staying on the line and they will continue to apply pressure or use scare tactics. What they don’t want to do is allow any time for the victims to take a moment and question if they are being scammed. This sense of urgency may also be observed by bank staff.

The detectives advise tellers and customer-facing employees to be alert if they see a customer who is either on their phone during transactions (using earbuds, held to their ear, or on speakerphone) or constantly looking at their phone on the counter for directions from the fraudsters.

Viney added that several victims shared that if a teller had passed them a note with a simple message like “I’m concerned you are being scammed. Please let me know who you are on the phone with,” that it may have helped the victim listen to their gut feeling that something was not right about the scenario and they may have been able to divulge to the teller what was really happening.

The Federal Trade Commission (FTC) shares this warning with consumers: Never move your money to “protect it.” That’s a scam. If someone claims there’s fraud or criminal activity on one of your accounts, and tells you to move money from your bank, investment, or retirement account to protect it, it’s a scam.

The FTC has several helpful resources on their website:
• An article entitled “No One Is Using Your Social Security Number To Commit Crimes. It’s a Scam”
• Anatomy of an Imposter Scam blog series breaks down how to recognize, avoid, and report imposter scams.

The Social Security Administration has comprehensive information on their website about avoiding Social Security-related scams.

June 25, 2024/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Lime-Green.jpg 972 1921 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2024-06-25 07:44:162024-06-25 08:56:36Detectives Warn: Be on the Lookout for Scam Victims Who Are Constantly on Phone at Bank
News, Resources

How Positive Pay Helps Fight Check Fraud

By Jason Young

Check use has declined for years as consumers gravitate toward faster, more digital transactions. Yet despite the slow and steady phasing out of checks, the financial sector has seen a recent uptick in check fraud.

FinCEN reported 680,000 instances of known check fraud in 2022, and those trends continued into 2023, with experts estimating a whopping $24 billion in losses. 40% of community bankers who responded to CSI’s 2024 Banking Priorities Executive Survey listed check fraud as one of the top types of fraud they encounter, only narrowly losing out to card and wire transfer fraud. Only half saw their prevention measures as very effective.

Why is check fraud on the rise, and what can banks do about it? This article explores the problem and how positive pay can help stem the tide.

Why is Check Fraud Increasing?
Fraudsters have sought to manipulate paper checks for about as long as checks have existed, but recent years have seen a surprising increase in fraud with a modern twist. For many, the resurgent trend became most evident during the distribution of COVID-19 relief checks, as fraudsters exploited the confusion and emotion of the moment. But it didn’t stop there, as check fraud has spread to areas like social security checks, unemployment benefits, paychecks and more.

Fraud in particular domains will inevitably increase when there aren’t enough safeguards to prevent it. In addition, instances of fraud tend to grow when the economy begins to dip or enter uncertain territory, like throughout a pandemic or times of intense inflation.

Although check use has decreased, the average dollar amount of the typical check has increased and is often used for more considerable expenses like paying employees or bills. So, it’s a ripe opportunity for fraudsters to make more in a shorter period.

How Can Banks Prevent Check Fraud?
As with all forms of fraud, the best defense against check fraud is staying alert and knowing the signs. For instance, consumers may be less inclined to mail a check if they are aware of the risks. They may be less likely to rely on checks altogether if they have the technology, training and convenience to pay another way.

However, education isn’t limited to customers. Bank personnel should be better trained to spot bad checks. If they know some red flags, they will be better equipped to prevent them. Similarly, some tellers may need to say no when a pushy fraudster (under the guise of a dissatisfied customer) urges them to overlook red flags.

Technology can also help in the constant effort to prevent fraud. For instance, an institution can update its remote deposit capture solution to enable real-time updates and alerts to its fraud team. Data visibility can help ensure bad checks are stopped, and good ones aren’t cashed multiple times. Implementing positive pay is another critical strategy.

What is Positive Pay?
Positive pay is an optional feature that banks can add to their existing core banking platform that tracks the checks issued and paid on selected commercial accounts, or the bank’s official checks account. It helps detect fraudulent checks by comparing ones to be cashed with ones already issued in the system and a predetermined set of parameters.

It’s also a form of insurance against fraud, losses and other liabilities to an institution. The system compares the account number, check number and dollar amount of each check presented against a list provided by the company to protect against forged, altered or counterfeit checks. Payee names may also be included on the list of issued checks. If the payee’s name from the check image does not match the payee’s name from the issued check file, exceptions can be generated.

When the information doesn’t match the check, the bank notifies the customer through an exception report, withholding payment until the company advises the bank to accept or reject the check. The bank can also flag the check, notify a representative at the company and seek permission to clear it.

Positive pay adds a layer of security by requiring verification of key details, minimizing the risks of unauthorized or altered checks being paid. For instance, altered checks will typically be entered outside the account-specified parameters with different names or amounts.

Exploring How Positive Pay Detects Check Fraud
Positive pay evaluates checks for various discrepancies that may indicate a fraudulent check. In general, the system looks for exceptions like:

  • Paid not issued item: The check number of the paid item does not match any issued item that was uploaded.
  • Duplicate check number: Two or more paid items have the same identification number.
  • Mismatched account: The amount of the paid item does not match the amount of the issued item. This could indicate a counterfeit check wherein the amount was fraudulently altered.
  • Voided item: A paid item matches an issued item marked as void and should not have been paid.
  • Payee name mismatch: The payee’s name from the check image does not match the name provided in the issued check file.
  • Stale checks: The check was not cashed within the days to post specified in the account options.
  • The amount exceeds the limit: The check exceeds the dollar amount defined in the account options.
  • Low/high check number: The check number of the paid item is lower or higher than the check number range defined in the account options.

Sometimes, a flagged item may result from an error, like a misread check or incorrectly entered information. If a check gets flagged, the amount is correct and the check is legitimate, the institution or their customer can approve the exception.

What Accounts are Eligible for Positive Pay?
Positive pay can be offered to any demand deposit account, making it a versatile solution for financial institutions and their clients. While it can be implemented across a range of accounts, accounts with large balances and a high volume of transaction activity will benefit the most from the service. Institutions may find positive pay especially beneficial for corporate, commercial and multiple cash management customers, as these entities often engage in a significant volume of check-based transactions.

Keeping Up with Current Trends
The surge in check fraud will likely dwindle as check use continues to phase out of practice. In the meantime, a healthy mix of education and well-implemented technology makes a significant difference.

Bankers everywhere should continue to keep an eye on these fraud trends for years to come. Want to know what else is on bankers’ minds this year? Don’t miss CSI’s interactive 2024 Banking Priorities Executive Report.

 

Jason Young serves as CSI’s senior director of enterprise banking.

June 17, 2024/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Dark-Blue-on-Light-Blue.jpg 972 1921 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2024-06-17 07:52:112024-06-17 07:52:11How Positive Pay Helps Fight Check Fraud
News, Resources

FDIC Shares Consumer and Bank Resources: Pig Butchering Scam

The Federal Deposit Insurance Corporation’s (FDIC) Office of Inspector General recently shared scam alert flyers about a prevalent scam – Pig Butchering – one designed for consumers and one designed for banks.

The scam is named for the practice of fattening a pig for slaughter. It is a type of confidence and investment fraud in which the victim is gradually lured into making increasing monetary contributions, generally in the form of cryptocurrency, to a seemingly sound investment before the scammer disappears with the contributed monies.

WBA alerted members to this scam in Compliance Journal and Compliance Corner in 2023, but unfortunately the scam has gained momentum.

Typically, perpetrators contact victims out of nowhere via text, DMs on social media platforms, or on dating apps. Relationships are cultivated and victims are encouraged to open accounts on online investment websites. After money is invested, victims who have been threatened with the demise of the relationship if they don’t invest additional funds are often locked out of accounts and instructed to pay extra fees. Ultimately the perpetrators vanish with the victim’s funds.

Click here for the consumer scam alert.
Click here for the bank scam alert.

Click here to access WBA’s Consumer Resources. You’ll find a variety of helpful Consumer Content resources to share with your customers.
Click here to access WBA’s Best Practice Library for numerous scam resources under the Security/Financial Crimes Best Practices.

Note: The Best Practices Library is exclusively for WBA members, who can contact questions@wisbank.com to retrieve the password.

June 10, 2024/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Lime-Green.jpg 972 1921 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2024-06-10 08:11:542024-06-10 08:25:59FDIC Shares Consumer and Bank Resources: Pig Butchering Scam
Member News, Resources

Executive Letter: Industry Resources for Understanding Check Negotiation and Fraud

By Rose Oswald Poels

As I meet and talk with bankers across the state, check fraud often becomes a topic of conversation as it remains a top issue and expense for WBA members. The volume of check fraud that is occurring is astounding considering overall check usage is decreasing. Unfortunately, much of the fraud occurs from mail theft whether it is at a consumer’s home, at a third-party mail carrier, or the U.S. Post Office facilities. I also know from my banker conversations that the amount of time bank staff spend in investigating and resolving claims involving check fraud is great, and that it can be frustrating when another bank in the chain is not responding in a timely fashion. There are many check fraud resources available from WBA and others; I thought it would be helpful to share those in this article so you and your staff can locate them in one place.

The following is a listing of resources that are meant to help educate staff on the rules applicable to check negotiation, identify where liability may lie regarding a fraudulent instrument, and directories meant to help banks handle check fraud claims more efficiently.

Directories:

  • ABA online directory of contact information for banks that need to file a check warranty breach claim with another financial institution. It is searchable by bank name, city, state, or FDIC number, so banks can find the right contact at the institution to help resolve a warranty breach claim. The directory is available to ABA members and non-members.
  • ICBA’s Solutions Directory to identify payments, compliance, and security service providers.
  • Nacha’s ACH Contact Registry for banks needing a check contact at a counterparty.

Education-Related Resources: 

  • Webinar: Check Breach of Warranty Blues
  • ICBA Check Fraud: A Practical Guide to Altered, Forged, and Counterfeit Checks for Community Bankers
  • 2023 WBA Negotiable Instruments Manual, UCC Rules Regarding Bank Liability and Responsibility for Wisconsin Banks
  • WBA is your bank’s local training provider for ABA online training. The recently revised 30-minute Fraud Prevention course can be assigned to staff for $55/registrant. Interested in enrolling a group of 15 or more? Contact WBAeducation@wisbank.com for further discounting options.
June 7, 2024/by Katie Reiser
https://www.wisbank.com/wp-content/uploads/2021/09/Triangle-Backgrounds_Yellow-on-Light-Blue.jpg 972 1921 Katie Reiser https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Katie Reiser2024-06-07 07:35:442024-06-07 07:35:44Executive Letter: Industry Resources for Understanding Check Negotiation and Fraud
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