When it comes to fraud, we can use a mountain of statistics to drive home the point that it impacts all of us. In 2023 alone the Federal Trade Commission reported more than 2.6 million cases of fraud with an astounding loss of $10 billion[1].
The average loss was $7,000 per case.
Businesses lost a total of $752 million.
Social media scams cost a total of $1.4 billion.
Long story short, fraud hurts everyone and causes financial institutions such heartburn that often policies are created to protect consumers that may end up slowing down day-to-day business.
“Most people don’t realize that a single transaction could touch multiple banks,” says Candie Schneider, AVP of Fraud at DATCU, “When we see a transaction that follows a similar pattern of fraud cases in the past, we hold it until it clears verification. Companies like Visa, Zelle, and so on do the same. Clearing all of those fraud checks could take a few hours or a few days.”
Playing it safe through an intricate system of checks and balances is much better than losing money through fraud, right?
“Absolutely,” says Schneider. “We will take every precaution needed to protect our member’s finances. I would rather explain to someone why it took an extended period of time to receive their money than to tell them it was lost to fraud, even if that means it slows down their transaction.”
And slowing down seems to be the major warning from most financial institutions. If someone or situation is causing you to rush through a transaction and is making you think with your emotions or a sense of urgency, stop what you’re doing. Fraudsters want you to panic rather than act calmly and with common sense.
That also explains many of the policies on transaction limits, check deposit holds, money transfer daily limits, and so on. Just about every policy in place is the result of a state or federal regulation or a previous instance of fraud. If a financial institution recognizes a large enough pattern of fraud, they will put in place a procedure to prevent it from happening again; thus, a potential delay in your transaction.
Kayla Walding, Chief People Officer and head of DATCU’s fraud department comments, “We and all of our partner financial institutions need to move quickly but with a layer of thoughtfulness that allows us to catch potential fraud. We’re really not trying to stand in between a member and his or her money, but we’re trying to prevent even the smallest loss from happening.”
[1] https://www.ftc.gov/system/files/ftc_gov/pdf/CSN-Annual-Data-Book-2023.pdf