The American Bankers Association is crediting bank IT systems for reigning in cheque fraud losses, as the total number of attempted frauds doubles to $4.3 billion in two years.
Attempted cheque fraud at the nation's banks surpassed $4.3 billion in 2001, doubling for the second time in four years, according to the latest ABA deposit account fraud survey report.
While attempted cheque fraud losses continued to rise, actual dollar losses remained relatively stable at $698 million, up slightly from the $679 million that banks lost in 1999, the last year of ABA's biennial survey. Banks' cheque fraud prevention systems were credited with keeping actual losses significantly lower than the attempted fraud numbers. Attempted fraud totaled $2.2 billion in 1999.
Since the last survey, the number of cheque fraud incidents increased 34 percent to 600,085 cases in 2001. However, average losses per case went down from $1,518 in 1999 to $1,163 in 2001.
Large banks share of losses fell from 60 percent in 1999 to 55 percent in 2001. Although they continue to have the largest number of attempts, large banks also have the best record in loss avoidance, preventing more than 80 percent of cheque fraud attempts.
On the other hand, community banks share of losses doubled - rising from six percent in 1999 to 13% in 2001 - signaling a shift in crime to community and mid-sized institutions. Community banks prevented more than half of their attempted fraud.
Losses remained relatively stable at mid-sized and regional banks.
Regardless of bank size, the most common type of cheque fraud in 2001 was forgery, with about one-third of fraud cases and fraud losses attributed to forged signatures and endorsements.