The US Federal Reserve has picked 22 payments industry leaders and online fraud specialists as the launch members of its latest initiative help improve the US payment system.
Over the next year the Fraud Definitions Work Group will work collaboratively with Federal Reserve leaders to formulate recommendations for improving the quality and consistency of automated clearing house (ACH), wire, and check fraud data.
The Fed said that although non-cash payments fraud remains a very small fraction of total payments value, it is a large number in absolute terms – about $8.3bn in 2015.
Ken Montgomery, Federal Reserve System payments security strategy leader, said, “Understanding payments fraud trends can help us mitigate fraud risk.
“However, there often are inconsistencies in the classification and reporting of payments fraud data from study to study and a significant lag between the time that fraud occurs and when it’s reported.
“In addition, fraudsters continually adapt their attacks as the use of ACH, wire, and checks for innovative faster payments evolves.”
The Fraud Definitions Work Group seeks to build a recommended payments fraud classification model that includes detailed definitions and/or categories to help the industry better understand key data points and address ACH, wire, and check payments fraud.
Work will begin later this month to examine existing payments fraud definitions and areas where new or changed definitions could be helpful.
The work group also will create a roadmap to encourage broad industry adoption of this classification model to improve the consistency and timeliness of available payments fraud data.
Members of the Fraud Definitions Work Group include Dondi Black, vice president, senior enterprise fraud strategist at FIS, Lee Kyriacou, vice president for real-time payments at The Clearing House, and Gasan Awad, vice president for fraud and anti-money laundering product management at Fiserv.
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