Check Fraud Detection and Prevention


Presented by:
Greg Benson

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    MYTH: Check imaging and check conversion has significantly driven paper checks out of the system and today consumers and businesses are making payments by checks obsolete.

(Americans still love to write checks. According to the last Federal Reserve study in 2000 over 42.5 billion checks were written)

LEGEND: Working with federal and state law enforcement, financial institutions have seen a dramatic increase in the imprisonment rate for check fraud offenses. (The imprisonment rate is 2% according to the Department of Justice 2004)

FACT: Over 500 million checks are forged annually in the U.S., with losses totaling more than $10 B (Source:Ernst & Young) and more than 1.2 million fraudulent checks are written each day - more than 13 per second - according to the Office of Comptroller of the Currency.

The best way to prevent check fraud is to know how to detect and prevent it. In the first part of this session, you will learn the basic steps in check fraud detection - the most common methods used to commit check fraud, the standard and "hidden" parts of a check, the different types of endorsements and their importance under the Uniform Commercial Code ("UCC"), visual and non-visual checks every bank employee should know when looking at a check, the steps to follow when accepting/cashing a check, and four simple steps to spot forged checks.

In the second part of the session, we will discuss how customers confuse when a check is available (Regulation CC) and when a check has cleared and how bank employees fail to communicate this information correctly and we will offer concrete remedies to help solve this growing customer service issue. We will also discuss how Regulation CC often helps make cashier's check fraud easier for the "bad guys" and how there is a little-known or used provision in Regulation CC that may allow you to place exception holds in excess of the limits stated in the regulation.

We will also discuss how to deter fraudulent money orders and travelers checks. As another added value of the session, we will offer up some valuable, simple and easy training ideas for your bank on how to detect and prevent check fraud.

According to the American Bankers Association (ABA"), in 2006 banks alone lost $271 million from fake checks - a 160% jump from three years earlier. All types of check-related fraud cost banks $969 million in 2006, states the ABA.

How can you not take time out of your busy schedule to listen and learn what the crooks are doing ("Branch Tour" and "Home Run" Fraud) and how you can detect and prevent check fraud?

About the speaker: Greg is Managing Director & CEO of Benson Consulting, Fairfax, VA, which provides consulting and training services nationally and internationally to financial institutions of all shapes and sizes, federal and state regulatory and law enforcement agencies, international money transfer operations and numerous banking trade associations. He specializes in BSA/AML and check fraud issues facing the financial services industry today. In addition, he presently serves as an expert witness in numerous cases involved with check fraud and deposit disputes. Previously, he served as Vice President and Chief Compliance Officer for Burke & Herbert Bank & Trust Company, Alexandria, Virginia for four years and as Director, Compliance & Security, for E*TRADE Bank, Arlington, Virginia for four years. While at E*TRADE Bank he assisted in the apprehension and conviction of the largest check fraud case in U.S. history ($40 million). Greg also served as Director, Retail Banking, Operations, Technology and Security for America's Community Bankers. Greg was a member of U.S. Treasury's Financial Crimes Enforcement Network ("FinCEN") Bank Secrecy Advisory Group for five years. He is actively sought as a featured speaker on compliance and security topics throughout the United States speaking most recently at the 13th Annual Security Officers Workshop in Philadelphia to rave reviews. Greg is a graduate of the University of Maryland and the ABA National Compliance School at the University of Oklahoma.

You have the right under this license agreement for this CD-ROM to use this presentation on a single-workstation. Use on a network is in violation of the copyright agreements. CD may be used by multiple users at a given institution but may not be placed on a network or in any other multi-user environment.

This program was recorded in its entirety in April 2008. The CD-ROM includes program slides, materials (if available) and follow-up Q & A document.

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  • Model: cd_checkfraud0408
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This product was added to our catalog on Monday 04 February, 2008.

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