Check Kiting Fraud & Scams Reviewing Its Impact On Financial Institutions
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INTRODUCTION
THE PROCESS
An in-depth exploration of check kiting fraud and scams.
Understand how business get access to fake funds with check kiting.
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IN-DEPTH LOOK
FRAUD PREVENTION
Get a 360-degree view of how check kiting takes place and the various forms it takes.
Know how you can keep your bank safe from fake check kiting scams.
What Is Check Kiting Fraud? An intricate form of check fraud, check kiting involves writing a check to transfer money from one account to another, even though the former doesn’t have the requisite funds. A bank naturally takes a few days to review and clear checks. During the time period, it deposits accessible money to the second account until it receives the funds from the issuing account. Within this small window, fraudsters siphon off the funds from the account that is supposed to receive money.
How Does Check Kiting Fraud Take Place ●
While illegal and fraudulent, many businesses are known to indulge in check kiting when they need an emergency loan or when funds are short. For instance, they may issue a transfer of a specified amount of money from account A to B even though they don’t have the required bank balance. However, before the check is cleared, the business ensures that it deposits the requisite amount in account A to avoid getting caught.
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Scammers, however, are engaged in check kiting of a serious nature. As per reviews by anti-fraud, antispam and anti-scam specialists, they have multiple bank accounts especially for check kiting. They move money from one account to another to generate thousands of dollars which were never theirs in the first place. If left unchecked, this can set banks back by millions of dollars.
Signs To Look Out For ● Excessive deposits and withdrawals every day. ● Overdrafts taken care of with checks. ● Fake checks and forgery. ● Frequent transfer between accounts held by the same person. ● More cash withdrawals than deposits.
Preventing Check Kiting Scams
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Use AI and machine learning tools
for fraud detection and to minimize time taken for manual screening of checks. Perform regular audits. Numerous deposits and spammy behavior with checks every day? A huge red flag. Be in contact with banking institutions to ensure the availability of funds, especially if sizable transfers have been made.
Thanks! Presented by: Aarti Shah Manager, Money 2.0 Conference https://www.money2conf.com/
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