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2009 AFP Payments Fraud and Control Survey

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Presentation to the Federal Reserve Board - Payments Fraud Working Group

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2009 AFP Payments Fraud and Control Survey

  1. 1. Payments FraudPayments Fraud Working GroupHighlights of the 2009 AFP Payments Fraud & Control SurveyNasreen QuibriaAssociation for Financial ProfessionalsMay 19, 2009
  2. 2. AgendaSurvey MethodologyFraud Attempts & Losses by Payment MethodRisk Mitigation ToolsQuestions www.afponline.org 2
  3. 3. Survey Methodology• Annual survey conducted since 2005• Online survey• 629 companies with annual revenues ranging from below $50 million and above $20 billion were surveyed in January of 2009 www.afponline.org 3
  4. 4. Attempted or Actual Payments Fraud 80% 72% 71% 71% 70% 68% 60% 55% 50% 40% 30% 24% 20% 10% 6% 0% -1% 0% 2004 2005 2006 2007 2008 -10% Attempted or Actual Payments Fraud % GrowthAlmost three-quarters of organizations experienced attempted or actual payments fraud. www.afponline.org 4
  5. 5. Fraud Attempts & Losses by Payment Method Responsible for Payment Method Subject to Suffered Financial Greatest Financial Fraud Loss from Fraud Loss Check 91% 47% 60% ACH 17% ACH Credits 7% N/A 3% ACH Debits 28% N/A 5% Corporate/Commercial Cards 14% 44%/17%* 10% Consumer Cards (Debit/Credit) 18% N/A 20% Wire 6% N/A 1%NOTES:• N/A - Data was not collected in the survey• *Of organizations subject to fraud, in using own corporate/commercial cards to make payments 44% of organizations suffered a financial loss; only 17% orone out of six organizations suffered a financial loss from accepting corporate/commercial cards www.afponline.org 5
  6. 6. Check Fraud• Types of Check Fraud• Remote Deposit Capture• “Holder in Due Course” www.afponline.org 6
  7. 7. Origins of Card FraudInternal Party 32% Unknown external party Third-party or outsourcer 70% 11% Employee 78% Outside Party www.afponline.org 7
  8. 8. Estimated Median Value of Payments Fraud $30,000 0.2 $26,600 $25,000 9% 0.1 $23,300 0 $20,000 $15,200 -0.1 $15,000 $13,900 -12% -0.2 $10,000 -0.3 $5,000 -0.4 -40% $0 -0.5 2004 2006 2007 2008 Estimated Median Value of Payments Fraud % Growth www.afponline.org 8
  9. 9. Payments Risk Mitigation Tools Revenues Revenues All over $1 under $1 Respondents billion billion Positive pay/Reverse positive pay 82% 87% 79%Checks Payee positive pay 50 60 41 “Post no checks” restriction on depository accounts 34 42 29 ACH debit blocks 71 79 60 ACH debit filters 55 62 49ACH ACH positive pay 19 19 18 Universal Payment Identification Code for ACH credits 5 7 3Other Other 5 4 5 www.afponline.org 9
  10. 10. Thank you… Nasreen Quibria Director, Payments Association for Financial Professionals Phone: 301.961.8676 Email: nquibria@afponline.org http://www.afponline.org/pub/pdf/2009_Payments_Fraud_Survey.pdf www.afponline.org 10

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