BID® Daily Newsletter
May 6, 2025

BID® Daily Newsletter

May 6, 2025

Top Payments Fraud Targets and How To Protect Your Institution

Summary: Debit card and check fraud are both on the rise. We discuss the trend, including how CFIs can maintain vigilance and protect their customers.

There aren’t many lucrative businesses you can get into by just spending your time, but thanks to social media video-based platforms, like YouTube and TikTok, people can build their personal brands into empires without investing much. From MrBeast to the D’Amelio sisters and the Paul brothers, influencers who start out posting videos on platforms can eventually rake in millions, based largely on their personalities and social media savvy. Yet, not everyone looking to make money using the internet with a minor upfront investment wants personal notoriety or even a clean record. Out in the murky dark web, an erstwhile scammer can buy the tech tools needed to defraud a financial institution for as little as $20. With the right set of skills, scammers can make quite a lot for themselves — all by tapping into banking systems and taking what they want.
It may come as a surprise, but debit cards are actually the top target of fraud for financial institutions (FIs). The Federal Reserve’s newest Financial Institution Risk Officer Survey found that three-quarters of financial institutions identified debit cards as the most frequent targets of fraud in 2024, with both attempts and losses rising 6% over the previous year.
Check fraud is not far behind, with 62% identifying it as the most frequent target. Check fraud attempts increased 10% YoY, but losses rose more slowly at 3%.
The statistics point toward the continued need for FIs to be vigilant in fighting fraud and to constantly review and update defenses. The fraudsters are proving to be resilient and crafty.
Other Frauds Take Their Toll
While debit cards and checks dominate fraud attempts, a host of other scams continue to plague FIs.
  • Non-bank payment apps. The growth of these apps has come with an accompanying growth in fraud. FIs reported these apps accounted for 36% of attempts, up 2%.
  • ACH. This was the second-fastest growing fraud, up 9% to 31%. But losses were muted, showing no gain YoY.
  • Credit card and mobile payment fraud attempts held fairly steady, both up 1% to 24%, while losses were down slightly.
  • Wire transfer, remote deposit capture, and instant/real-time payments all declined in fraud attempts and are experiencing the lowest levels of fraud.
Cybersecurity and Fraud
Rising numbers of fraud victims were induced by scams (particularly cyber scams) and account takeovers, often through the theft of credentials.
FIs worry most about cybersecurity, with a 7% rise in concern. Eight of 10 respondents said cybersecurity issues were persistent or rising.
Credential Theft Concerns
Credential theft keeps bankers awake at night. Research from PYMNTS found that 90% of FIs reported an increase in credential-based fraud over the previous year. Stolen credentials enable fraudsters to execute payments using real accounts, and it is a scam difficult to stop in its tracks because the payments can appear legitimate.
Generative AI and Fraud
Generative AI is making financial fraud easier to undertake and harder to detect. New AI programs can produce fictitious voices and documents that can trick FIs. Plus, these models are easily available to fraudsters. Existing countermeasures may not be up to the task of dealing with these new deepfakes.
Protective Measures for Your Institution

The news is not comforting. So, what can FIs do about rising fraud threats? For starters, they can regularly stress the importance of fraud prevention across their institutions. They should also do regular checkups of their protections and countermeasures. Here are some strategies to pursue: 
  • Conduct periodic audits of procedures. You might even conduct test scenarios with your teams to have them run through a fake incident and identify any flaws or shortcomings in your procedures.
  • Review and update identification methods. Multifactor authentication is one widely used method. Newer methods like device fingerprinting and biometrics should be explored.
  • Keep up to date on the latest fraud trends and scams and make sure your bank is equipped to deal with them.
  • Use real-time monitoring to detect and stop fraud as it is happening.
  • Use AI and real-time monitoring to detect and prevent fraud. AI tools can help monitor and detect fraud in ways that are faster and more effective. Incorporating real-time monitoring with these tools can catch fraud even quicker.
  • Educate customers on how to protect themselves. Remind customers of the importance of monitoring their accounts for fraud and of the need for securing their credentials.
Fraud continues to plague FIs, with most incidents clustered around debit cards and checks. The growth of these fraud attempts should remind FIs of the need to be extra vigilant and update risk methods with the latest defenses.
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