Fed’s Fraud Definitions Work Group releases new classification model

The Federal Reserve’s Fraud Definitions Work Group Thursday released a new fraud classification model, the Fraud Classifier, for payments. The model, designed to help organizations better understand the magnitude of fraud involving payments, can be applied across an organization to ensure internal consistency.

The Fed’s Fraud Definitions Work Group was created last year to help address industry challenges due to inconsistent fraud classification and lags in reporting. The group includes representatives from credit unions and others in the financial services industry.

The model was specifically developed to help address fraud involving ACH, wire or check payments, but can be used to classify fraud regardless of payment type, channel or other characteristics.

In addition, the work group has developed an industry adoption roadmap, identifying strategy and potential steps to encourage voluntary industry wide use of the model.

 

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