Financial crime prevention firm Featurespace has launched a partnership with fraud detection software maker OrboGraph.
The collaboration, announced Tuesday (July 23), is aimed at protecting financial services companies from check fraud.
“Check fraud is a growing and concerning area of financial crime — we know banks and financial institutions are experiencing a rise in reports and are in need of more advanced tools that can tackle the issue,” Barry Cohen, CEO of OrboGraph, said in a news release.
“Combining our expertise with Featurespace will enable us to deliver a more robust and comprehensive fraud detection solution, helping financial institutions to stay ahead of increasingly sophisticated check fraud schemes,” Cohen added.
According to the release, the partnership will involve Featurespace and OrboGraph integrating their fraud-detection services to better identify and prevent fraudulent check activities.
“By bringing together the two technology platforms, financial institutions will be empowered with a single solution that will enhance detection of fraudulent checks and reduce false positives, thereby improving operational efficiency and customer experience,” the release said.
The release pointed to data from the Financial Crimes Enforcement Network showing that check fraud is becoming more prevalent compared to other types of fraud, accounting for more than a third of all fraud at depository institutions last year.
And as reported here in March, The Federal Reserve Bank of Boston has estimated that there had been 680,000 reports on check fraud in 2022, almost double what they reported in 2021 — with losses in 2023 estimated to come to around $23 billion.
“The criminals also take advantage of ‘float,’ the days between when a check is accepted at a bank or business and when funds are withdrawn from the checking account. By the time the fraudulent check is detected by the account holder, the thieves are often long gone,” the Fed said in a blog post.
Among the solutions recommended by the Fed: “Whenever possible, switch to secure electronic payment methods.”
Meanwhile, PYMNTS spoke earlier this with Featurespace founder Dave Excell, who warned of the increasing prevalence of scams as scammers discover new tools.
“Unfortunately, the amount of scams and the prevalence of them has continued to increase, as there are new tools available to scammers … to victimize vulnerable populations,” he told Karen Webster as part of the “What’s Next In Payments” series.
Among the new threats is the rise of job-related scams, which have jumped 118% year over year, according to data from the Identity Theft Resource Center. These scams often prey on job hunters by pretending to be legitimate employment agencies or recruiters.
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