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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.
For more information, credit unions are encouraged to review the Fed's FAQs and visit the website to register for access to educational resources and support tools.
NAFCU frequently engages with the Fed on its work and initiatives to make the payments system faster and more secure and has previously met with Fed staff to discuss the strategy for achieving more secure payments.
Tim Boike, vice president of industry relations at the Federal Reserve Bank of Chicago, last year gave members of NAFCU's Cybersecurity and Payments Committee an update on the Fed's efforts to identify and mitigate payments fraud.