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Collaboration Among Competitors Makes Sense in Defending Against Checking Fraud

Credit unions must work together to outpace todays fraudsters as Dodd-Frank change in withdrawal rules has unintended consequence.

By Lou Anne Alexander | Updated on October 16, 2012

Collaboration among competitors doesn’t often make sense. But when it comes to fighting fraud and protecting the broader financial system, collaboration is a first line of defense. 

Conventional wisdom suggests that check fraud should be in deep decline. After all, check usage has fallen somewhat in recent years. But check fraud remains a very real threat to credit unions and banks of all sizes. The 2011 American Bankers Association Deposit Account Fraud Survey Report revealed that, industry-wide, check fraud costs financial institutions nearly $900 million annually, with the leading causes being counterfeit checks, returned deposit items and forgeries. Sixty-eight percent of community institutions and 95% of mid-sized institutions are victimized each year. 

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