The Federal Reserve Bank of Richmond published an Econ Focus magazine article on the rise in payments fraud and how regulators and financial institutions are responding, with a focus on recent check-fraud tactics. The article points to a viral check-fraud hack on TikTok in 2024 that led banks to freeze accounts as fraudulent deposits surged. It reports that fraud losses totalled USD 12.5 billion in 2024, while noting that underreporting likely makes actual losses higher. It also describes criminal methods including use of stolen mail keys and check-washing techniques that alter payee names and amounts, and highlights the Federal Reserve’s FraudClassifier and ScamClassifier models as tools to help financial institutions classify fraud types and monitor emerging schemes.
Federal Reserve Bank of Richmond 2025-08-12
Federal Reserve Bank of Richmond article examines payments fraud surge and highlights Federal Reserve FraudClassifier and ScamClassifier models
The Federal Reserve Bank of Richmond's Econ Focus article addresses rising payments fraud, emphasizing recent check-fraud tactics. It highlights a viral TikTok hack in 2024 that led to account freezes and reports USD 12.5 billion in fraud losses, likely underestimated due to underreporting. The article also discusses criminal methods and the Federal Reserve's FraudClassifier and ScamClassifier models for classifying and monitoring fraud.