In the past 24 hours, several ICBA members have reported a new form of fraud they have experienced in their banks this week: check fraud related to home equity lines of credit. Members of ICBA's Check Fraud Task Force have also reported an uptick in HELOC-related check fraud.
What caught my attention is the fact that fraudsters are using information available in public records to create checks drawn on HELOCs. HELOC documents often contain all the information a fraudster needs to generate checks, including the customer's name, address, lender, signature, and account number.
I encourage you to do the following to mitigate this growing source of fraud:
Do not print the account number on new HELOC documents. Some document software packages have a setting that can be turned "on" or "off," and may default to "on."
Review all HELOC checks processed. Since the volume of HELOC checks being processed is likely low relative to overall check volume, a daily review is a quick way to look for anomalies.
Advise customers to regularly review their HELOC accounts. Customers don't typically scrutinize their HELOC accounts like they do checking or savings accounts, and added vigilance could help avoid losses.
Report incidents to the FBI's Internet Crime Complaint Center (IC3) on their website.
ICBA continues to work closely with community banks across the country, as well as the broader industry, to help address fraud and scams, including check fraud.
If your customers are affected by fraud or scams, I encourage you to post a message on ICBA Community’s fraud subgroup. Community posts are a great way to learn of emerging trends from your peers.
