Federal Reserve: Nearly 40 percent of fraud losses through debit cards in ’24

Nearly 40 percent of fraud losses at financial institutions last year originated through debit cards, according to a Federal Reserve survey of more than 360 risk officers at financial institutions. .Check fraud accounted for 30 percent of losses amid increases in counterfeit checks, check washing and payee forgery, according to the report. Automated Clearing House fraud constituted 9 percent of losses, while 5 percent originated through credit cards. Seventy-three percent of FIs reported experiencing a debit card fraud attempt in 2024. Sixty-two percent experienced check fraud attempts last year, while 36 percent reported attempted fraud through nonbank payment apps. The number of financial institutions seeing attempted check fraud increased 10 percent from 2023-24. “In addition to challenges with scams and mule accounts, traditional legacy fraud approaches like forgery, counterfeits, stolen mail and impersonating authorized parties were noted as primary drivers,” according to the Federal Reserve.The report was released as checks remain a popular vehicle for fraud. In 2023, the average daily volume of checks processed by the Fed was 12.6 million with a combined value of nearly $34 billion. Also that year, more than 1.96 million suspicious activity reports were filed by U.S. depository institutions, more than double the number from a decade earlier, according to the Financial Crimes Enforcement Network. Mail theft complaints soared 327 percent from 2018-23, according to the U.S. Postal Inspection Service. Twenty-seven percent of financial institutions with more than $1 billion in assets listed physical forgery/counterfeit as the top increasing fraud event, followed by 21 percent citing compromised credentials and 19 percent reporting physical alteration. Twenty-eight percent listed cybersecurity as a pressure of rising concern, compared with 19 percent citing regulatory uncertainty and 18 percent reporting mule account activity.