Fraudsters attempted to steal $25.1 billion for bank deposit accounts in 2018, according to the American Bankers Association’s (ABA) 2019 Deposit Account Fraud Survey. Banks’ efforts to safeguard deposit those accounts saved $22.3 billion of those funds from theft – the equivalent of $9 for every $10 in attempted fraud.
The ABA survey has been conducted biennially on a national basis since 1993, tracking data on various types of fraud including check, debit, bill pay, person-to-person (P2P) transfers, wire and automated clearinghouse (ACH) transactions.
Check fraud is the most prevalent form of fraud depository institutions have to worry about, the report indicates, accounting for 60 percent of all attempted fraud against deposit accounts and includes the attempted use of counterfeit checks, forged signatures and return deposited items.
The report notes an uptick of $15.1 billion in attempted check fraud from 2016 to 2018. Banks’ prevention measures stopped $13.8 billion (91 percent) of attempted check fraud during that timeframe.
“Banks continue to take extraordinary efforts to protect and safeguard customer accounts,” ABA president and CEO Rob Nichols said in a statement. “As fraud schemes become increasingly more sophisticated, this survey demonstrates that banks are meeting that challenge by investing in equally sophisticated fraud prevention systems and constant vigilance by dedicated employees.”
The $1.3 billion in deposit account losses resulting from check fraud accounted for 47 percent of all losses affecting deposit accounts.
“Sometimes, what’s old is new again as we’ve seen criminals gravitate back toward check fraud,” ABA Senior Vice President, Risk and Cybersecurity Policy Paul Benda said. “Fortunately, banks are well-equipped to catch this type of fraud and do it successfully day in and day out.”
Debit card fraud resulted in the second highest fraud-related loss total among deposit institutions at $1.2 billion, accounting for 44 percent of all fraud losses. Electronic banking transactions accounted for the remaining 9 percent, or $265 million, in fraud-related losses in 2018, including frauds involving bill-pay services, P2P transfers, wire transfers and ACH transactions.
Point-of-sale debit card fraud has evolved in the U.S., the report indicates. Whereas counterfeit cards accounted for 47 percent of loss in 2016, they accounted for only 25 percent two years later. During that same time, card-not-present transaction fraud increased to account for 42 percent of loss in 2018, up from 30 percent loss in 2016.
Survey respondents indicated that certain scams directly targeting consumers (e.g., fake check scams, Internet job scams, lottery scams), phishing emails and business email compromise schemes, social engineering (including recruitment of money mules via social media), elder financial abuse and ATM/gas pump skimming are the top risks to the banking industry and its customers are likely to face over the next 12 months.
“It’s important to remember that bank customers are protected against losses,” Benda said. “When a customer reports an unauthorized transaction, the bank will take measures to recover the loss and protect the account.”
ABA provided the following recommendations for consumers to help mitigate their risk of being victimized by fraudsters:
- Don’t share private information with anyone
- Shred sensitive documents – receipts, banks statements and unused credit card offers before throwing them away.
- Monitor online banking account transactions regularly and immediately notify your bank of fraudulent activity.
- Sign up for text alerts from your bank for certain types of transactions, such as online purchases or transactions of more than $500.
- Protect your mobile device using a passcode lock on your smartphone and other devices, among other security methods.
- Keep tabs on your mail as fraudsters often look for monthly bank or credit card statements or other mail containing your financial information and consider enrolling in online banking to reduce the likelihood of paper statements being stolen.
- Monitor your credit report.
- Protect your computer by having active, up-to-date virus protection software.
- Report any suspected fraud to your bank immediately.