FinCEN Reports Rapid Increases in Suspected Fraud

Suspicious activity reports (SARs) climbed at double-digit rates in the seven categories relating specifically to fraud in 2008, according to The SAR Activity Review—By the Numbers, Issue 12. The semiannual report by the Financial Crimes Enforcement Network (FinCEN) includes SAR filings through Dec. 31, 2008.

Check fraud (17% year-to-year increase), mortgage loan fraud (23%), consumer loan fraud (34%), wire transfer fraud (58%), commercial loan fraud (14%), credit card fraud (22%) and debit card fraud (10.5%) all saw substantial increases. In a press release, FinCEN said SARs in the fraud categories may be reported in association with other suspected crimes, or a SAR may indicate several types of suspected fraud being committed by the same suspect. FinCEN noted that 35% of identity theft SARs filed by depository institutions were listed in combination with credit card fraud and/or one or more other violations such as check fraud or consumer loan fraud.

SARs in all categories increased 3% in 2008. Contributing to the increase were SARs filed by depository institutions, which were up 13%, but that increase was offset by an 8% drop in reports by money services businesses (MSBs). The decline was particularly significant for MSBs since it came on the heels of increases of 41%, 29%, 29% and 17%, respectively, the previous four years.

FinCEN Director James Freis said the results could reflect increased incidence of fraud, but he also credited greater awareness. “Institutions that file SARs are more aware today of the types of mortgage fraud being perpetrated, and are more likely to file a SAR. I hope our data and our outreach to the industry continues to facilitate that,” he said in the press release.