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Catalyst Corporate Launches Real-Time Deposit Fraud Protection
Thursday, June 19, 2014 6:55 AM

Catalyst Corporate Federal Credit Union has launched its real-time deposit fraud protection service and seven credit unions have already started the implementation process. The real-time deposit fraud protection service – provided by Early Warning™ Deposit Chek® – is now available as a component of Catalyst Corporate’s Teller Capture remote deposit service powered by Bluepoint Solutions.

As a component, the real-time deposit fraud protection service notifies credit unions of potentially high-risk deposits at the point of transaction. Items matched against the Early Warning National Shared Database receive positive or negative status responses that credit unions can use to expedite funds availability decisions and prevent fraud.

Early Warning, an established leader in fraud mitigation and risk management for financial institutions, is owned by five major U.S. banks. Financial institutions nationwide contribute daily account status updates and other information. They also contribute transit and return information on the accounts of non-participating financial institutions. The database includes information on more than 90 percent of the country’s deposit accounts and is updated throughout the day.

Here’s how the process works: When a member submits a check for deposit at the teller line, the teller scans the check immediately. MICR line data and account information on the item are transmitted to Early Warning’s database.

Results from the database comparison are sent back to the credit union teller or back office-staff – while the member is still in the teller line – for consideration in the decision-making process. Alert messages categorize deposited checks by level of risk in one of the following three categories:

  • “Hard-hit” warning – check written on closed account, pending closed account, stop payment request, etc.
  • “Soft-hit” warning – check written on non-existent account, check likely to be returned, overdrawn account, lost or stolen check, etc.
  • “Informational” response – check written on a line of credit, credit card or brokerage account, check written on a new account, etc.

When a check with a high risk of return is identified, the teller can respond immediately by informing the member and applying an extended hold or rejecting the item.

“In a highly competitive retail environment, financial institutions try to differentiate themselves by boosting member service, often through such practices as check cashing, immediate cash back on deposits and same-day availability of funds,” said Sharon Begarney, Catalyst Corporate’s Director of Support Services. “Unfortunately, fraudsters are aware of this trend, and they make the most of any delay in the processing cycle.

Timing is of the essence when you’re trying to prevent potential losses and real-time scanning of checks gives immediate notification of potentially risky deposits. Reacting in real-time is critical to protecting both the member making the deposit and the credit union from a potential loss.”

Catalyst Corporate’s Teller Capture service is part of a full suite of remote deposit capture solutions powered by Bluepoint Solutions, including branch, mobile, ATM, merchant and home capture services, that operate on a single administrative platform. For more information on Catalyst Corporate’s real-time fraud protection service and/or Teller Capture, contact an account executive at contactus@catalystcorp.org or 800-442-5763, option 5.