PYMNTS MonitorEdge May 2024

DataVisor and Mitek Team to Stem Rising Tide of Check Fraud

woman at computer worried

Fraud and risk platform DataVisor says it has launched a partnership with identity verification provider Mitek.

The collaboration gives financial institutions (FIs) a single-platform check fraud protection service, the companies said in a Tuesday (April 9) news release.

“Our vision has always been to create an end-to-end, comprehensive platform that effectively combats all types of financial fraud,” said Yinglian Xie, CEO and co-founder at DataVisor.

“By joining forces with Mitek, we’re elevating our check fraud protection capabilities. It also streamlines the experience for our customers, eliminating the need to engage with multiple solutions in silo and therefore can address different fraud challenges more effectively with a centralized, holistic view.”

According to the release, the partnership lets FIs execute real-time orchestration of check fraud decisions, reducing fraud losses and improving operational efficiencies. The solution can detect and prevent a variety of check fraud crimes, including check kiting and remote deposit capture fraud, as well as check washing, counterfeit checks and identity theft, the release said.

As noted here in February — upon the release of another Mitek check fraud solution — data from the Financial Crimes Enforcement Network (FinCEN) shows that suspicious activity reports (SARs) for check fraud at depository institutions more than tripled between 2018 and 2022, increasing by 201.2% during those years.

Banks recorded more than 447,000 SARs between January and October of 2023, marking another record setting year for check fraud.

The Federal Reserve Bank of Boston estimated last year that there had been 680,000 reports on check fraud in 2022, nearly double what they reported in 2021 — with losses in 2023 estimated to be around $23 billion.

“The criminals also take advantage of ‘float,’ the days between when a check is accepted at a bank or business and when funds are withdrawn from the checking account. By the time the fraudulent check is detected by the account holder, the thieves are often long gone,” the Fed said in a blog post.

As PYMNTS wrote last month, disbursements offer an avenue in which businesses and government agencies can prevent check fraud, by cutting back on paper check issuance.

Research by PYMNTS Intelligence shows that 57% of consumers received at least one disbursement in the past year, with digital disbursements becoming increasingly popular, as roughly a third of consumers surveyed said that instant digital payment methods are their preferred method to get those payments.

“Drilling down into the instant disbursements themselves, the data showed that a third of consumers chose that method for insurance payments,” PYMNTS wrote. “A similar percentage did so for income and earnings, while 43% had done so in order to receive funds from loans. All of these are key interactions where the paper check can, conceivably, be replaced by faster, safer payments.”