Fidelity’s recent decision to add a 16 business day hold period to some accounts and lower the mobile deposit limit from $100,000 to $1,000 in response to rampant check fraud It focuses on the growing challenges for institutions. In September 2024, Fidelity warned of a surge in fraud, with fraudsters using social media to target the company’s money management accounts, recruiting customers and withdrawing funds before deposits were confirmed.
“Many of the recent ‘bug’ incidents have been simple check fraud by the first party (i.e. the customer),” said Thomas French, senior financial industry consultant, fraud at data and AI solutions provider SAS. told Financial. brand. “Effectively, the customer is depositing the check themselves. They know they don’t have enough funds in their account to cover the check, so they withdraw the funds before the item clears. This This is first-party fraud and fraud.”
Although Fidelity was successful in stopping fraudulent deposits, the move raises even bigger questions. How can financial institutions balance fraud prevention while maintaining the customer experience their customers expect? According to Recorded Future’s 2024 Check Fraud Report, check fraud will increase by 90% from 2021 to 2023. Suspicious activity is estimated at $21 billion. This challenge is forcing financial institutions to rethink their digital deposit policies or risk losing customer trust.
read more ”
Source link
