A newly published report from the American Bankers Association reveals key themes across the banking ecosystem: Fraudsters keep targeting old habits, while newer trends are gaining traction quicker than ever.
The ABA's report showed is that popular fraud trends like check fraud and deposit account fraud continue to contribute to overall fraud losses — accounting for roughly $2.5 billion collectively. The report also details how point-of-sale debit card fraud trends have been shifting over the past few years. When comparing 2016 to 2018 figures, data indicates that POS debit card fraud from counterfeit frauds now accounts for 25% of the losses, compared to 47% in 2016. Looking at card-not-present transactions (CNP), those losses are account for 42% of counterfeit fraud, when compared to a 30% loss in 2016.
Despite the gloomy outlook on many of the fraud figures, the report indicated some bright spots for financial institution leadership.
The ABA's report highlighted that banks were able to stop $22.3 billion in attempted fraud against deposit accounts in 2018. Total attempted fraud against deposit accounts hit $25.1 billion in 2018 (up from $19.1 billion in 2016), but banks’ prevention measures stopped nearly $9 out of every $10 of attempted fraud. This national survey measures attempted fraud against bank deposit accounts through channels including check, debit, bill pay, P2P transfers, wire and ACH transactions. The rise in fraud accounted for $2.8 billion in losses to the industry, according to the report.
“Sometimes, what’s old is new again as we’ve seen criminals gravitate back toward check fraud,” Paul Benda, senior vice president, risk and cybersecurity policy at ABA, wrote in a press release. “Fortunately, banks are well-equipped to catch this type of fraud and do it successfully day in and day out.”
Check fraud accounted for $1.3 billion of industry deposit account fraud losses (47%), while debit card fraud losses hit $1.2 billion of losses (44%). Debit card losses decreased slightly/remained stable, but losses increased for both check and electronic channels. Total attempted check fraud increased to $15.1 billion and accounted for 60% of attempted fraud against deposit accounts, but banks were able to stop roughly $13.8 billion in attempted check fraud (91%). The remaining $265 million in losses (9%) came from electronic banking transactions (bill pay, P2P transfers, wire and ACH transactions).
The report highlighted what bank leaders consider the top five fraud trends, which consists of: Debit card, online banking, wire originations, check deposits and P2P transactions. The top listed customer victimization scams as the top risks to the banking industry over the next 12 months. These include actions like phishing emails, business email compromise schemes and ATM/gas pump skimming.