Check Fraud, Scams, Account Takeover

Check fraud, scams and account takeovers dominated the fraud landscape in 2023. Banks and other financial institutions are expected to continue to struggle with account takeovers as fraudsters have changed their modus operandi, making it difficult to track fraudulent proceeds.

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Historically, if criminals wanted to take over an account, they would target a customer’s MFA token and use a payment channel to move the maximum amount possible, said Rene Perez, director of financial crimes sales and financial crimes consultant with Jack Henry & Associates.

“Most fraud systems now detect that large amount and block it every single time because that is not my normal pattern,” Perez said. Fraudsters have switched to smaller transactions but a wider number of victims, he said.

“They will do one $500 Zelle and probably six $700 ACHs because most digital systems have external transfer. They will do the smaller amounts in RTP and FedNow.”

In this video interview with Information Security Media Group, Perez discussed:

• Check fraud and how the industry will respond;
• Major fraud trends this year;
• The outlook for 2024.

Perez leads financial crimes sales and financial crimes consultant at Jack Henry & Associates. He has more than 20 years of experience in the field and previously worked in fraud prevention at a top-60 U.S. bank.