• “Processors” who fabricated or hired
others to make fictitious checks for the
purpose of conducting bust-outs;
• “Brokers” who solicited people with
legitimate bank accounts; these would
lend their accounts to be busted out in
exchange for a fee; and
• “Runners” or “washers” who allegedly deposited fictitious checks into, then
withdraw funds from, the account to be
busted out.
A few years ago a criminal group of
more than 700 people cost U.S. banks
over $80 million in losses. The most
common scheme involved fraudulent
loan applications that misstated how
long the applicant had been employed
a na l y t i c s
and grossly exaggerated yearly salaries. Via online applications, the culprits
received credit cards with sizeable credit limits.
Often, these people also received
cash advances on the card. Shortly after
the cash advances, they sent the issuing
bank a check, frequently for slightly more
than the outstanding balance. Although
the check was returned for insufficient
funds, the fraudulent payment caused
the bank to temporarily increase credit
lines. By the time the fraud was discovered, the bank was out tens of thousands
of dollars per fraud incident.
Despite the large potential losses,
however, even the most sophisticated
operators are losing ground to fraud.
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