Duplicates, Other Fraud Concerns Pave Way for More Data Sharing

By Lauryn Franzoni

Thursday, October 24, 2013

Problems with duplicate presentments in an RDC environment begin innocently enough: a check remotely deposited (say using a mobile device) inadvertently would get deposited a second time. But it doesn’t take long for fraudsters to spot this weakness in the RDC value chain. That’s why banks and credit unions need to integrate duplicate detection with fraud prevention routines.

“Since the passage of Check 21 there have been plenty of concerns about duplicates,” CONIX Systems, Inc. Client Services Manager Charlie Brinza explained. “But many banks put in their efforts too late,” Brinza added. For example, Day 2 reviews may not be enough to catch errors before customers ID problems. “With the increased access to accounts from mobile devices, customers are finding the errors more quickly, and there’s a high cost to correct it,” Brinza said.

Brinza was speaking at a Technology Showcase presented by CONIX Systems, Inc. during the RDC Summit 2013. He and CONIX Systems, Inc. Director of Sales Steve Fortson discussed a new risk solution CONIX Systems, Inc. has developed for real-time scoring of RDC client eligibility. Called Risk Detective™, it’s available as a standalone solution or as an addition to an integrated product suite the company has developed. The suite is supported by the Cloud and includes a shared data base, cross-channel support, user-defined rules and workflow integration. It also incorporates Day 1, multi-channel, multi-bank solutions for duplicates and fraud.

Moving duplicate detection to a cloud-based platform immediately increases efficiency because multiple sites can perform the deposit reviews. The benefits amplify with mobile deposits since there is no one eyeballing deposits.

Because the enterprise system is platform agnostic, Brinza said, it can also send images out to other systems, grab and process the results with up to 13 dispositions so quickly a 40,000 item batch takes just 90 seconds to process.

CONIX System Inc.’s “Fraud Detective®” which shares the same platform with its “Dupe Detective®” system applies user-defined fraud controls based on historical transaction data to incoming payments to determine whether they are typical or suspect transactions. Account activities that are indicators of kiting, account takeover, and other fraudulent activities are detected and routed for further decisioning. “We partner or integrate with most any vendor out there,” Fortson noted. He predicted platform vendors would continue to develop ways to communicate without diminishing individual brand value.

Taking a lesson learned in credit processing, CONIX Systems, Inc. is encouraging its users to work together by providing a cross-bank inquiry system to allow for automated endorsement review and ultimately real-time detection of fraudulent deposits. “This requires cooperation between banks, of course,” Brinza said. He also urged increasing cooperative cross-bank inquiry, noting that there is no national database for banks to use for fraud detection.

The majority of fraudulent dupes occur in institutions in contiguous geographic areas. CONIX Systems, Inc. is now working with its customers in adjacent regions to share the data through its platform. “We all need to keep our systems open and work with each other,” Brinza said. “Those who don’t will be sitting in the cold and seeing fraudulent activity increase.”