November 13, 2024 Newswires

Federal Reserve Financial Services' New FedDetect® Offering Tackles Commercial Check Fraud

Business Wire

Federal Reserve Financial Services helps financial institutions detect duplicate activity at no additional cost

CHICAGO--(BUSINESS WIRE)--
Federal Reserve Financial Services (FRFS) today announced the expansion of FedDetect Duplicate Notification for Check Services to include commercial checks, alongside its existing Treasury check notification service. Financial institutions can now see deposit information and images of potential duplicate items for commercial checks, supplementing their existing check fraud mitigation tools.

According to a 2024 survey of treasury practitioner members and prospects by the Association for Financial Professionals, 65% reported checks as the payment method most susceptible to fraud. Despite this, among those organizations using checks, 70% report no immediate plans to discontinue their use.

“Commercial checks remain a critically important form of payment, but they’re also vulnerable to fraud,” said Shonda Clay, FRFS executive vice president and chief of product and relationship management. “With the expansion of our FedDetect service, we are providing financial institutions of all sizes another powerful tool in their risk mitigation toolkit. Even better, we are now offering this service at no cost as part of our commitment to supporting depository institutions in the collective, industry-wide mission to combat fraud.”

FedDetect Duplicate Notification underscores the Federal Reserve’s purposeful investment to support banks and credit unions as they fight fraud related to check clearing. Despite reductions in check volume, a recent FRFS study of financial institution risk officers found that check fraud had the largest year-over-year increase, up 12% in 2023. The FedDetect service helps financial institutions mitigate loss of funds due to fraud or deposit capture errors by sending notices of potential duplicate Treasury or commercial checks across multiple payment channels and financial institutions.

About Federal Reserve Financial Services

As the U.S. central bank, the Federal Reserve System provides payment services and seeks to foster the stability, integrity and efficiency of the nation’s monetary, financial and payment systems. Federal Reserve Financial Services are a comprehensive suite of payment and information services offered to financial institutions that include the FedNow^® Service for instant payments, FedACH^® Services suite for transactions through the ACH network, the Fedwire^® Funds Service for electronic funds transfers, the Fedwire Securities Service for processing securities transfers, Check Services for electronic and paper check processing, FedCash^® Services for supplying currency and coin, the National Settlement Service for settlement of interbank obligations, and the FedLine^® Solutions that allow direct access to these services. Visit FRBservices.org^® for additional information.