Clues to Detect Mobile Check Deposit Fraud

If you’re already using TrueChecks® to scan your mobile deposits automatically, then you’re in better shape than most FIs out there. In fact, according to the 2017 AFP Payments and Fraud Control Survey, 75% of organizations in 2016 experienced check fraud, and the mobile channel is a hot spot for this type of activity. Without a database like TrueChecks® to spot fraudulent remote deposits, they can be harder to catch than checks coming through the teller line. Here are some clues that your bank or credit union can deploy now, to help beat the fraudsters at their mobile check deposit fraud game.

If you’re already using TrueChecks® to scan your mobile deposits automatically, then you’re in better shape than most FIs out there.

First, account and transaction analysis are essential. However, what FI today has the workforce to do that on thousands of deposits every day? Looking for context when evaluating mobile check deposits is vital. These details include balance and deposit history, the user’s typical locations when depositing checks, along with any return item history. Additionally, the length of time the depositor has been banking with your FI, and what kind of relationship they’ve built up are two more critical factors. Most fraudulent mobile check deposits will either come from new accounts, or there will be a recent history of odd activity. 

Another approach is to check for interconnected accounts that may be assisting in this fraudulent activity, or even cross-channel activity being perpetrated by a more organized effort. This may include wire or ACH transfers in addition to mobile deposits. Furthermore, look if the account is being used for regular activity, like groceries, gas, restaurants, and similar daily transactions. If not, you may have a problem. Accounts that appear only to be used for deposits and withdrawals are fraudulent more often than not.

Another approach is called device fingerprinting. This is when a device is analyzed for hundreds of characteristics and behaviors including browsers, language, location or operating system. This approach can even detect if fraudsters have attempted to mask any of these identifying properties. If an account owner is supposedly based in GA, but the deposit is coming in from a mobile device in Kenya, that should raise the alarm bells.

For most FIs, training staff to review deposit and withdrawal patterns, and look for any significant changes, will typically identify what’s fraudulent and what are normal transactions from a trusted customer. Most people have consistent transaction patterns you can quickly identify, such as similar payroll deposits on a set schedule, everyday expenses from local merchants, or checks in similar amount ranges. For instance, the payroll deposit amount and deposit frequency should always be the same unless they changed jobs, so any deviation from the usual deposits should be flagged. Also, immediate withdrawal following an unusual deposit should generate alerts.

By keeping these tips in mind, your FI can arm employees with the knowledge to make smarter decisions on funds availability for suspect mobile deposits. However, pair this knowledge with Advanced Fraud Solutions’ real-time remote deposit capture protection, and you’re much more likely to identify those potentially fraudulent check deposits more often, and stop them from clearing before you take a loss.

— written by Advanced Fraud Solutions