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Succeed with report support.


IS THE ROAD TO SUCCESS PAVED WITH reports? That concept certainly rings true for Central Bank of the South's fraud investigation unit. Before the unit was restructured about three years ago, Central's fraud investigations were conducted by one investigator who handled both checks and credit cards throughout Alabama. Needless to say, this investigator was busy, barely skimming the surface in most incidents.

Now, thanks to an innovative statistical reporting system, Central's fraud investigation unit has grown from one investigator to a fine-tuned network of four investigators strategically located throughout the state. When a customer discovers a fraudulent check, credit card, or debit card, the information is quickly reported to the appropriate investigator, who initiates an investigation.

Headquartered in Birmingham, AL, Central Bank of the South is the fourth largest bank in the state and is known for its innovative approach to banking. The bank was the first in Alabama to offer statewide and Saturday banking. Central has also been a leader in developing an advanced data and voice communications network.

Almost any fraud investigator can trace a bad check or investigate credit card fraud, but Central's fraud investigation unit reaches far beyond the traditional scope of fraud investigation by examining control weaknesses and emphasizing loss prevention. This innovative approach has gained the support of senior management, has proven cost-effective, and has deterred crime.

Complementing the fraud investigation unit is a state security warning system, which is monitored and controlled from Central's main security control center in Birmingham. Whenever a customer's checks or credit cards are lost or stolen, the information is received, analyzed, and then distributed by electronic voice mail to Central's state banking locations. If a loss has occurred or if preventive action can be initiated, the information is also distributed to the appropriate resident investigator for the necessary follow-up.

How did Central's fraud investigation unit grow from one investigator to a statewide network in just three years? And how did this expansion provide successful results? Very simply, by identifying and verifying the need for such expansion and by proving the investigators' worth. In other words, the road to success truly is paved with reports.

In developing a statistical reporting system, the bank's senior management had to establish a fraud investigation policy. The policy needed to cover the types of fraud to investigate along with the procedures to follow in conducting such investigations. The policy emphasized using the criminal justice system rather than simply becoming an agent of the bank's collection and recovery departments. Central's legal staff and branch banking executives assisted in drafting the policy.

The policy was then distributed to branch banks throughout the state in an extensive educational campaign. A case filing system and cross-index reference filing system were next to be developed, the object being to distinguish clearly and accurately the various types of cases investigated. The case numbering system not only segregates the various fraud categories but also distinguishes the geographic area of the state involved.

In case numbering, the first numerical sequence indicates the case year, the second numerical sequence indicates the ongoing case number, the third numerical sequence indicates the originating geographic area of the state, and the final letter sequence indicates the type of case. For case 89-100-01CK. 89 represents the year of the case, 100 is the ongoing case number, 01 represents the geographic area, and CK means it is a check case. The case jackets and cross-reference index cards are color coded for quick, easy reference.

Once the case filing system was in place, the written report format was developed. Various banks throughout the country were contacted in an effort to gain ideas, and extensive research was conducted. Finally, four main reports were constructed: an investigator report, a supplementary report, a case status report, and an investigator's informal notepad. Investigators could use other miscellaneous reports such as a suspect profile, photo lineup, and witness list as needed.

The case status report contains a section designed to assist the branch banking system in identifying and tracking possible policy violations or weaknesses in control. The section was designed not as a punishment but as an educational tool.

As resident investigators receive fraud information from branches throughout the state or learn of fraudulent card transaction activity from Central's Visa and MasterCard center, a case number is given and the cases are reviewed. Depending on its circumstances, each case is either accepted or denied. If it is accepted, a case file is established and the investigation starts.

If the case is denied, the denial section alone is completed on the case status report, including a reason such as insufficient evidence or an insufficient reported lost amount. A copy of the report is then distributed to the sending party. This procedure has proven cost-effective, as it allows investigators to separate the cases that apparently cannot be investigated and concentrate on the workable ones.

Another reason for the fraud investigation unit's success is its in-house training program. The resident investigators are continuously updated on trends in the investigation industry and the latest criminal schemes. This training consists of the following types:

* verified training - lectures or video training classes

* calculated training - magazines or other reading material (a routing slip accompanies all articles distributed to the various regions, and the routing is documented in the training file)

One of the most important factors in any organization's growth is proving its necessity and the worth of its staff. This task is accomplished by the fraud investigation unit's monthly status report. This report outlines the investigators' case categories; case activity; criminal justice activity; and loss, recovery, and prevention activity. Complementing the status report is a case worksheet that gives a ready reference of all cases worked or pending and notes the status of such cases.

Central Bank's fraud investigation unit is forging ahead. Through the course of accurately reporting its worth, it has turned an almost nonexistent fraud investigation function into one that is well recognized in Alabama law enforcement and criminal justice circles. The majority of investigators' time is now spent locally - gathering facts, solving cases, and carrying out public relations duties - rather than in traveling.

In 1988 alone, resident investigators obtained close to 300 felony warrants throughout the state for a variety of state and federal criminal law violations. Even better, the unit managed to recover substantially more funds than were reported lost.

About the Author . . . Charles C. Robey is security coordinator with Central Bank of the South in Birmingham, AL. He is a member of ASIS.
COPYRIGHT 1989 American Society for Industrial Security
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Title Annotation:bank fraud investigation
Author:Robey, Charles C.
Publication:Security Management
Date:Dec 1, 1989
Previous Article:Computer and Communications Security.
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