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Using AI to Detect Fraudulent Transactions could be Powerful
Written by Karl Kaluza
on January 23, 2024

Deposit Fraud takes a few forms and is yet another method fraudsters use to scam customers out of their money. One method is to send someone a check for more than the agreed-upon amount. In this case, the account owner deposits the check and returns the overpayment portion to the fraudster. However, the check is not valid. Once the bank discovers this, the customer will be on the hook for the full check amount while the fraudster makes out with the overpayment.

Remote deposit capture (RDC) is another deposit fraud tactic. It is accomplished by depositing a check at several banking locations using RDC. Because banks can't verify checks with each other in real time, the fraudster is able to make the same deposit multiple times. Because RDC doesn't require the account owner to be physically present, tellers have no way to verify identification.

Credit Unions can mitigate deposit fraud by tapping into fraud services and utilizing enhanced security protocols. One service that can help is called Verify Deposit (formerly known as Deposit Chek® Service). Verify Deposit uses a shared database to analyze millions of banking transactions. It can be used to verify the availability of funds at different banks. It also has a workflow for new account openings that can help cut down on fraudulent account openings.

RDC has become a weak link in the fight against deposit fraud. Utilizing Verify Deposit with RDC can help decrease the occurrences of deposit fraud.

Enhanced security protocols include teller training, which can be difficult given the high level of teller turnover. However, by providing tellers with tools that can detect fraud in real time, training costs can be cut while the efficiency of tellers improves.

ATM use continues to climb. It is a critical space in the fight against fraudulent deposits. Arming ATMs with real-time fraud detection software can help reduce the occurrences of duplicate or counterfeit check deposits.


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