Bank Funds Transfer Fraud

More than a few bank clients have reported recent incidents involving Funds Transfer Fraud.  There are a wide variety of schemes out there – and they are getting more creative every day.

Advice for bankers…
Coverage for these losses should be in your fraud-bond (AKA the bond).
Test and test again your systems for catching fraudsters when they hit you (not if, but when they hit you).
Strengthen your call-back procedures – probably a fraud-bond required process.  Many bonds refuse to pay if you did not perform a call-back.
Here are some questions for your insurance agent:
-What is our coverage limit for computer fraud?
-What is our coverage for funds transfer fraud?
-What is our deductible for computer and transfer fraud?
-If we are tricked into a transfer and do not perform a call-back, do we have coverage?
Advice for other-than-bankers…
Train everyone who has access to your accounting software and banking systems to identify fraud.  Test them by getting someone to call in claiming to be from your bank – or hire an ethical hacker to test your systems.
Make sure that you have computer fraud insurance coverage.  Check on your employee dishonesty coverage while you are at it.
I’m always glad to talk if you have any comments or questions.