Florida Banking July 2024

PRESIDENT'S PERSPECTIVE

COUNTERING FRAUD AND PROTECTING CUSTOMERS REQUIRES ALL HANDS ON DECK

BY KATHY KRANINGER, FBA PRESIDENT AND CEO

F raud is rampant, and protecting consumers and our institutions from the resulting losses is an escalating problem. In 2023, the FBI’s Internet Crime Complaint Center (IC3) received a record 880,418 complaints with potential losses exceeding $12.5 billion. This is a nearly 10 percent increase in complaints received, and it represents a 22 percent increase in losses suffered compared to 2022. Older Americans are among the most susceptible to these fraudsters, and that means Floridians are a high target

factor authentication; implementing a culture of vigilance inside your organizations; supporting consumer education; and engaging in collaborative partnerships and information-sharing with other financial institutions and law enforcement. On that last piece, some progress has been made in improving services and information-sharing platforms. Let me name a few: • Nacha has approved a new set of rules intended to reduce the incidence of frauds, such as business

group. In 2023, total losses reported to IC3 by those over the age of 60 topped $3.4 billion, an almost 11 percent increase in reported losses from 2022. There was also a 14 percent increase in complaints filed with IC3 by elderly victims. While no reporting captures the full extent of these crimes, the data shows that the trends are heading in the wrong direction. We know all financial institutions are investing in countering this growing issue — and that it is

email compromise, that make use of credit-push payments; • Nacha members are required to submit to the ACH Contact Registry, which has check contacts as well; • ABA Check Fraud Claim Directory provides contact information for banks needing to file a check warranty breach claim with another financial institution;

“FRAUD IS RAMPANT, AND PROTECTING CONSUMERS AND OUR INSTITUTIONS FROM THE RESULTING LOSSES IS AN ESCALATING PROBLEM.”

• The Treasury Department’s Treasury Check Verification System is intended to catch canceled, duplicate or other problematic Treasury checks at the time of presentment; and • The Financial Crimes Enforcement Network’s alert on fraud schemes offers tips for filing Suspicious Activity Reports. FBA was a leader in this space more than two decades ago when we launched Fraud-Net as an information sharing platform for financial institutions and law enforcement. While it is still operating, use of Fraud-Net is down to a trickle. Yet the need for such information sharing remains.

easier for scammers and bad actors to find the vulnerabilities and gaps in our systems than it is for us to mitigate and fill them. In fact, our very human nature makes us the weakest links! Further, we know customers simultaneously expect a frictionless experience and security in their transactions. What is there to do? I wish I could give you a silver bullet here, but we all live in the real world. A multi-faceted approach is key, and everyone has a part to play. Instituting strong security measures, such as multi

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