As debit card usage escalates, so does debit card fraud.Īccording to the Fed's 2010 Payments Study, debit card usage exceeds all other forms of noncash payments. Of the banks surveyed, 80 percent indicated that they had reported check fraud losses in 2008, the same percentage as in 2006.ĭebit card fraud is usually carried out through point-of-sale signature, PIN, and ATM transactions. Check fraud was one of only two categories-the other was money laundering-that had an increase in SARs between 19.Īnother study that touched on the prevalence of check fraud is the 2009 Deposit Account Fraud Survey Report of the American Bankers Association, which estimated that check-related losses amounted to $1.024 billion in 2008, up from $969 million in 2006. noncash payments were made electronically, a 9.3 percent annual increase since the Federal Reserve’s last study in 2007."Īccording to a recent speech by an official from the Financial Crimes Enforcement Network (FinCEN), reports of scams involving checks increased 19 percent in the first six months of 2009, and 27 percent of all Suspicious Activity Reports (SAR) filed in 2009 were for fraud-related activities. The decline in check usage was recently captured by the Federal Reserve's 2010 Payments Study, which showed that "in 2009 more than 75 percent of all U.S. Interestingly, even as check use declines, losses from check fraud and attempts at such fraud rise. This type of DDA fraud is increasing most likely because of the introduction of new channels like mobile and account-to-account transfers.ĭeclining check use but rising check fraud According to the Fiserv paper, there is also cross-channel fraud, which occurs with accounts that have more than one access point. When fraud occurs with checks, a perpetrator can empty the DDA by forging check endorsements or drawer signatures, counterfeiting or altering checks, or carrying out check kiting schemes. When it occurs with debit cards, a fraudster can steal or skim the physical card, or use a phishing scheme to steal a PIN, then use that information to deplete the account. The paper mentions a survey by McKinsey & Co., which revealed that an estimated $5 billion to $7 billion in annual losses can be attributed to DDA fraud, a figure expected to grow at a annual rate of 7 percent.ĭDA fraud can take many forms. According to a white paper by Fiserv, banks are becoming increasingly concerned about DDA fraud. At the same time, though, they provide that many more ways for criminals to carry out fraud schemes, as hacking tools (PIN phishing and skimming) become more sophisticated and fraudsters more bold with their attempts to fleece DDAs. Today's demand deposit accounts (DDA) have multiple access points–online, mobile, and ATM–affording consumers a great deal of convenience. Southeastern Rental Affordability Tracker.Community Development at the Federal Reserve.Survey and Diary of Consumer Payment Choice.Center for Workforce and Economic Opportunity.Center for Quantitative Economic Research (CQER).Center for Financial Innovation and Stability (CenFIS).Advancing Careers for Low-Income Families.Research REIN New Orleans Request Information.Research REIN Nashville Request Information.Research REIN Miami Request Information.Research REIN Jacksonville Request Information.Research REIN Birmingham Request Information.Research REIN Atlanta Request Information.
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