NCJ Number
84312
Date Published
1981
Length
20 pages
Annotation
Ways to prevent various types of fraud in banking operations are described, and techniques for investigating internal bank fraud are suggested.
Abstract
Much account and credit fraud in banking can be prevented by following carefully designed practices for opening accounts or granting credit, and once an account or loan has been established, account activity and loan payments should be regularly reviewed for signs of inappropriate behavior. A high volume of in-and-out account transactions and frequent overdrafts could be a clue to fraud. Check-cashing fraud can be significantly countered by advising customers of actions to take to limit opportunities for persons to make fraudulent use of their blank checks. Credit card fraud can be limited by ensuring prompt communication between the functional areas of credit, operation, and collection. Training the bank's staff to follow fraud-preventing procedures and notice signs of fraud are also important preventive steps. Internal control in the areas of organization and procedures, personnel practices, use of records, and auditing can also help prevent fraud. One of the key elements of a successful investigation of internal bank fraud is the immediate reporting of a suspicion of fraud. Bank records are the primary documentation to be reviewed by the investigator. If an examination of records indicates criminal action by an employee, the employee should be interviewed, using detailed questions planned before the interview. The investigation concludes with a written report of the findings, detailing any procedural violations that contributed to a loss.