Increasing Visability of Re-Deposited Items with Cross-Industry Bank Data

August 13, 2014

The mobile banking industry is growing exponentially as indicated in Javelin’s Mobile Banking, Tablet and Smartphone Forecast 2013-2018 report published in March of this year; 95 million adults used mobile banking in 2013, a nearly 40% increase over 2012. To further validate the increase in the use of mobile banking services, a recent survey conducted by showed that sixty-three percent of financial institutions (FIs) stated they provide their customers the ability to deposit checks using a mobile device – and nearly 100 percent of FIs surveyed will offer this ability within the next year.

Until now fraud losses associated with remote deposits have been minimal and 90 percent of banking executives believe the rewards of mobile banking outweigh the risks. As more banks race to expand their mobile menu, anticipating where fraud will shift is of critical importance.

Recently I participated in a Mitek-sponsored webinar addressing issues around FIs and mobile remote deposit capture. One key vulnerability that surfaced was concerns about duplicate item fraud -- where someone deposits and then re-deposits the same check multiple times. Some of the concerns stem from the pressures FIs receive from their customers who are asking for higher deposit limits. Analysts predict that duplicate item fraud will increase as deposit limits go up.

As an industry leader in fraud prevention and risk management, Early Warning, is acutely aware of the limitations with duplicate item detection solutions that offer a limited scope of activity – often reflecting deposit activity at a single institution.

In its ongoing mission to protect the global financial system and reinforce a trusted exchange, Early Warning recently enhanced its Batch Deposit Chek® Service to include duplicate item detection. By leveraging cross industry bank data, FIs who contribute data to the service gain the ability to cross-check all deposits they receive against one of the industry’s most current, accurate and comprehensive deposit databases to determine if the item has been deposited at teller windows, ATMs, back offices or via mobile devices.

Our own research confirmed that of the items we identified as potential duplicate items, 73 percent were genuine duplicate items, either submitted in error by customers or indicative of actual re-presentment fraud or counterfeits.

There were other benefits as well. FI’s can now…

  • Identify fraudsters in both the remote channels as well as more traditional sectors
  • Reduce potential check returns/chargebacks
  • Mitigate duplicate item fraud – even if they don’t currently offer mobile deposits to their customers
  • Improve customer service by increasing mobile deposit ceilings with confidence
  • As mobile banking, and the associated fraud, evolves, Early Warning continues to develop innovative solutions to provide FIs with a greater ability to protect their customers and institutions.

About the Author:
David Barnhardt is Early Warning’s Vice President of Product Management where he helps develop deposit and payment solutions. He joined Early Warning in 2014 bringing with him thirteen years of executive experience in bank fraud and risk management. During his career, he has done extensive work in mitigating deposit, debit, e-commerce, and internal fraud. He also does significant work in link analysis and collusive ring investigation.

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