Fraud Company Scores Big in Reducing Counterfeit Checks, Cards

by Jim Rubenstein, CU Times Senior Correspondent

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In what is described as a “dramatic success story” of combating counterfeit check TrueChecks, which relies on what is called a “storehouse or database library” of counterfeit information previously unavailable or hard to access through traditional means, is over two years, and so with the aver- age counterfeit check in the amount of $3,000, that is $4.2 million saved over two years.”

Moreover, said Reaves, Allegacy has “virtually eliminated counterfeits from their branches.”

On TrueCards, the system enables the CU to stop plastic card fraud by identifying “the common point of compromise independent of third party databases or waiting on and plastic fraud, a new fraud prevention company based in Greensboro has hit the ground running and is reportedly saving bundles for credit unions and banks in North and South Carolina.

Officials with Advanced Fraud Solutions, forecast hundreds of finan- cial institutions in the U.S. will start using the service in the months ahead based on a track record that includes a $4.2 million, two year savings on coun- terfeit checks at the $1.1 billion Allegacy Federal Credit Union of Winston-Salem, NC.

In another tes- timonial of apply- ing the software technology, the $21 million Health Facilities Federal Credit Union in Florence, S.C. said it saved $4,400 on the first day of installation after branch queries were made denying two counterfeit checks.

The two fraud detection services, which were installed more than two years ago at Allegacy, have now been formatted into two products called TrueChecks® and TrueCards®. the one “drawing the most attention,” said Lawrence Reaves, vice president of sales and marketing at AFS. TrueChecks prevents losses from check fraud because tellers and security staff can learn quickly whether a check is fraudulent without having to lose valuable time “after the fact or after alerts are issued,” explained Reaves.

“This system is different from others because it is proac- tive rather than reactive,” he said, adding that “a key benefit industry alerts that come after the fraud.”

It was learned that AFS helped identify such compromises in connection with the TJX is the database containing a cross reference of known counterfeit information com- piled over the years at CUs and banks.”

“The value in TrueChecks,” he said, “is that the counterfeit check is identified at the teller who has information about the check and the nature of the counterfeit before it is accepted.”

“For example, we have identified and stopped 1,408 checks at Allegacy security fraud earlier this year, and in 2006 helping save millions for CUs in the Carolinas.

Without mentioning TJX, AFS noted that Dean Adams, the firm’s vice president of fraud services, was named “International Fraud Investigator of the Year for 2006” by the International Association of Financial Crimes Investigators for his role in identifying fraud “before the industry giants.”