Payments fraud plagues 75 percent of FIs, Minneapolis Fed reports
Payments fraud losses remain an issue for financial institutions across the country, but customer diligence — such as reviewing transaction activity and statements online and reporting suspicious activity to their FI — is very effective across all payments types.
These findings are part of a survey by the Federal Reserve Bank of Minneapolis that polled nearly 300 financial institutions across the country. The survey and resulting publication, 2017 Financial Institution Payments Fraud Mitigation Report, aimed to identify ways to reduce payments fraud, a press release said
The survey found that payments fraud losses are a problem for 75 percent of FIs. Losses on debit and credit cards are the most common, reported by with 96 percent of debit card issuers and 77 percent of credit card issuers in 2016.
More than 80 percent of FIs said they are issuing chip cards for authentication, illustrating the continuing increase in chip card adoption.
"This report provides great insights into what FIs are doing and find effective to mitigate payments fraud," Guy Berg, vice president of the payments, standards, and outreach group at the Minneapolis Fed, said in the release. "FIs could use the information to benchmark their own fraud mitigation methods against those identified as effective in the survey."
The report provides information about use and relative effectiveness of payments fraud detection and prevention methods as rated by respondents. Risk mitigation methods for each payment type are grouped into three categories: transaction screening and scoring; authentication methods; and other reporting and risk management methods.
Download the full 2017 Financial Institution Payments Fraud Mitigation Report.