PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

U.S. Fights Rising Check Fraud Through Use of AI

By Tom Nawrocki
October 21, 2024
in Fraud & Security, News
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Faster Payments Is Pressuring Businesses to Dump Checks

Faster Payments Is Pressuring Businesses to Dump Checks

Artificial intelligence is having a huge impact on the U.S. federal government’s fraud detection efforts. The Treasury Department credited AI with helping officials prevent and recover more than $4 billion in fraud during fiscal 2024 alone—six times the amount recovered in the previous year.

And it’s not just digital payments that are subject to AI’s scrutiny. According to CNN, machine learning technology helped the Treasury recover $1 billion in check fraud in fiscal 2024, nearly tripling the amount recovered the year prior.

The U.S. federal government is one of the largest issuers of checks in the world, making fraud detection a particularly acute issue. Last year, the  Treasury disbursed 1.4 billion payments totaling $6.9 trillion, covering everything from Social Security payments to tax refunds.

Along with the sheer volume of checks issued, the government also maintains a tremendous amount of data related to these programs, which fuels its AI fraud detection efforts.

“Machine learning AI technologies are proving to be effective fraud detection and mitigation tools due to their ability to efficiently consume and derive insights from large, complex, data sets absent a great deal of human involvement,” said Kevin Libby, Analyst of Fraud and Security at Javelin Strategy & Research.

A Pandemic Problem

When the government launched relief programs in the wake of the pandemic, fraud of all kinds surged. The U.S. Department of Labor’s Office of the Inspector General estimated that there was $45.6 billion worth of fraud resulting from unemployment checks. The Treasury Department reported that check fraud has increased by 385% since the pandemic.

As a result, U.S. officials quietly started using AI to detect financial crime in late 2022. The use of machine learning to detect check fraud was a focal point, and in the end, was highly successful. The government now reports that by identifying unusual transaction patterns, it can stop check fraud almost in real time. The goal is to act quickly enough to alert banks to anomalies before fraudulent checks are cashed.

“AI is adept at rapid pattern recognition and anomaly detection,” said Libby. “This has proved to be invaluable in rooting out various forms of check fraud, especially in the case of novel or emerging fraud schemes.”

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: AIArtificial IntelligenceCheck FraudFraud Risk and AnalyticsU.S. Treasuryunemployment

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    fraud as a service

    Keeping Up with the Most Dangerous Fraud Trends of 2026

    December 8, 2025
    open banking

    Open Banking Has Begun to Intrude on Banks’ Customer Relationships

    December 5, 2025
    conversational payments

    Conversational Payments: The Next Big Shift in Financial Services  

    December 4, 2025
    embedded finance

    Inside the Embedded Finance Shift Transforming SMB Software

    December 3, 2025
    metal cards

    Metal Card Magnitude: How a Premium Touch Can Enthrall High-Value Customers

    December 2, 2025
    digital gift cards

    How Nonprofits Can Leverage Digital Gift Cards to Help Those in Need

    December 1, 2025
    stored-value prepaid

    How Stored-Value Accounts Are the Next Iteration of Prepaid Payments

    November 26, 2025
    google crypto wallet, crypto regulation

    Crypto Heads Into 2026 Awaiting Its ‘Rocketship Point’

    November 25, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result