Analytics Magazine Analytics Magazine, November/December 2014 - Page 43

• “Processors” who fabricated or hired others to make fictitious checks for the purpose of conducting bust-outs; • “Brokers” who solicited people with legitimate bank accounts; these would lend their accounts to be busted out in exchange for a fee; and • “Runners” or “washers” who allegedly deposited fictitious checks into, then withdraw funds from, the account to be busted out. A few years ago a criminal group of more than 700 people cost U.S. banks over $80 million in losses. The most common scheme involved fraudulent loan applications that misstated how long the applicant had been employed a na l y t i c s and grossly exaggerated yearly salaries. Via online applications, the culprits received credit cards with sizeable credit limits. Often, these people also received cash advances on the card. Shortly after the cash advances, they sent the issuing bank a check, frequently for slightly more than the outstanding balance. Although the check was returned for insufficient funds, the fraudulent payment caused the bank to temporarily increase credit lines. By the time the fraud was discovered, the bank was out tens of thousands of dollars per fraud incident. Despite the large potential losses, however, even the most sophisticated operators are losing ground to fraud. n o v e m b e r / d e c e m b e r 2 014 | 43