The U.S. Secret Service calls check fraud one of the greatest threats to the country's financial system. With losses of more than $5 billion per year nationally, banks are struggling to effectively and efficiently investigate fraud incidents and build enforceable cases. Retailers lose billions more in fraud and organized retail theft (ORT), and identity theft is the fastest growing crime in America.
Part of what makes these cases so difficult to prevent, detect and catch is that banks and retailers have little way of knowing that fraud has occurred until after a customer notifies them of an unauthorized withdrawal or an identity theft, which can be up to 60 days after the fact. Since fraudsters know about this time gap, they're likely to have hit several more bank branches or retail stores by this point and left town. ORT suspects travel rapidly from state to state, frustrating local investigators.
By changing identities and moving fast, fraudsters can evade detection by even the most diligent investigators. Even if the fraudster has hit other branches within the same bank chain, it is rare that an investigator would be able to find and link the evidence needed to connect the fraudster to multiple cases. In fact, oftentimes a repeat offender is caught and only booked with one charge of fraud because the other incidents have either not yet been discovered or have not been linked to the same fraudster.
With only one count, the criminal posts bail and goes back to work within hours. If the fraudster is smart enough to hit different bank chains and retailers across several states, law enforcement has a very tough time connecting the dots or tracking down the evidence needed to charge and convict a suspect.
Though identity theft, fraud and ORT pose unique challenges to both investigators and law enforcement agencies, various efforts are now converging to effectively combat the problem.
Advances in video surveillance
First, video surveillance technology has progressed to help investigators identify and track fraudsters across branches and stores. While surveillance systems have traditionally just recorded and stored footage -- requiring investigators to sift through hour after hour of real-time video to find the event or suspect -- new products have incorporated analytical tools like facial recognition and advanced video searching capabilities.
Using technology similar to what made millions of Internet pages searchable, these systems make thousands of hours of video from geographically distributed locations searchable in minutes. Underlying analytics like face recognition and motion analytics help investigators find information about a specific case, link fraudsters to other cases and ferret out links between accomplices to build cases against fraud rings.
Secondly, while video surveillance has progressed, industry and law enforcement also have increasingly sought ways to share information about criminals. The CrimeDex network, recently acquired by 3VR Security, located in San Francisco, California, provides a searchable online database that contains 14,000 suspects and nearly 200,000 fraudulent check items representing just under $1 billion in losses. Investigators and law enforcement officers can search the database by a number of parameters including check number, various suspect details, account number or location. In addition to the database, CrimeDex provides a network of more than 600 financial institutions, retailers and law enforcement agencies that are working together to fight crime by sharing information about criminals and cases.
Together, these solutions enable investigators to link suspects to all of their incidents, build an enforceable case, share their information with other investigators to determine whether this criminal can be linked to an even larger case and sync up with law enforcement to ensure the suspect is prosecuted for all of his crimes. The CrimeDex network also issues regional crime alerts to warn members about criminals working in their area.