WASHINGTON—The Federal Reserve's Fraud Definitions Work Group has released a new fraud classification model, the Fraud Classifier, for payments.
The Fed said the model is 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 its analysis, NAFCU noted the work group has also 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.