WBA: Network of Banks, Police Helps Fight Financial Fraud

For more information, contact
Cheryl McCollum, 608/441-1216

Thirteen-State Alert System Adds Layer of Consumer Protection

MADISON – With financial fraud increasing, Wisconsin banks and law enforcement agencies have one more tool available to help protect consumers.

Bankers and police officers can send and receive instantaneous alerts across 13 states whenever they became aware of counterfeit or stolen checks, identity theft, scams and other financial fraud, through a service provided free of charge through the Wisconsin Bankers Association.

FinCrime (www.fincrime.com) is an online database shared between banks and law enforcement agencies in Wisconsin, Iowa, Minnesota, Nebraska, Kansas, Missouri, Ohio, Indiana, New Jersey, Georgia, North Dakota, South Dakota and Montana.

At a time when banks are spending more time and money on fraud detection software, employee training and implementing new policies, FinCrime provides an additional layer of protection for bank customers against fraud, said Kurt R. Bauer, WBA president/CEO.

“FinCrime allows for ‘Amber Alerts,’ if you will, for financial fraud,” Bauer said. “In this case, the purpose is to warn other institutions and prevent crime before it occurs.”

How It Works

Upon registration, bank staff and law enforcement officials establish a personal profile and select criteria for alerts – for example, geographic area or type of fraud. After users are verified and approved, they will receive alerts via e-mail each time an incident matching those criteria occurs.

Should a new incident occur, a registered user may log on to the password-protected web site and enter as much information about the crime as possible. The system automatically compares the incident with others in the database. If a potentially related case is found, the persons posting both the original and the new incident are notified.

Bankers and police officers can also search existing cases in the database at any time, based upon criteria such as names, dates, geographic area and type of fraud. FinCrime also allows users to post digital images of suspects and scans of forged or phony checks.

Success Stories

FinCrime has been helping banks avoid fraud since 2002. Often, success stories span state lines. In one case, a shortchange artist defrauded a bank in Grinnell, Iowa, of $1,500. Local police quickly filed a report on FinCrime and an alert went out. A holding company in Omaha, Neb., passed along the alert to its banks. When the man tried the same scam just one day later in Sterling, Colo., a teller recognized him from the FinCrime description. He was arrested and brought back to Iowa.

In other cases in Omaha and Fargo, N.D., police searched FinCrime after they arrested suspects. As a result, they were able to charge the suspects with additional, related crimes.

Most of the cases entered into FinCrime are check fraud incidents, said Steve Looney, vice president of technology for the Iowa Bankers Association and manager of FinCrime. “We’re seeing more fraudulent official documents, such as cashiers checks, and stolen checks and bank documents,” he said.

Fraud Increasing

In a recent survey of Wisconsin bank executives, 28 percent of bankers said that financial crimes committed against their customers have increased significantly over the past six months, and another 46 percent said they have noticed a slight increase.

Each check fraud case prevented can add up for banks, which experience an average loss per case of $1,098, according to 2003 statistics from the American Bankers Association. As the number of counterfeit checks increases – especially due to scams that target sellers of cars and other large items – that number has no doubt risen.

Robert Brooks, president of Marathon Savings Bank in Wausau and a WBA Board member, said his bank has used FinCrime since it was introduced.

“It’s been valuable to see what’s going on in the world of fraud, whether it’s across the street or across state lines. The e-mail alerts let staff know what kinds of fraud people are trying to perpetrate and better prepares them,” Brooks said.

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The Wisconsin Bankers Association (www.wisbank.com) is the state’s largest
financial industry trade association, representing 310 commercial banks
and savings institutions, their nearly 2,300 branch offices and 27,000 employees.