Knowledge Center

Proactively Stopping Fraudulent Activity

1/20/2010
Mutual Fund Solutions
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Business Challenge

Criminals are driven to find different methods of attempting fraud against mutual fund companies as the economy becomes more challenging. Fund complexes require a service provider with aggressive Anti-Money Laundering (AML) controls and fraud detection programs to identify and prevent potentially significant fund losses.

Our Solution

We developed a complete and thorough approach to ensuring our clients’ assets are protected by integrating our AML and fraud detection efforts. This approach allows us to standardize business processes and leverage the latest detection technologies and expertise throughout our organization. As a result, we can identify and mitigate risk for our clients before an account is even opened.

We promote a risk-focused culture and have front line associates with more than 20 years of industry experience. Our highly tenured professionals and sophisticated technology enable us to immediately assess potential risks and suspicious activity. We validate the identity of our customers and verify application documents before establishing the account. Our procedures ensure our data is clean, consistent, and credible by combining both manual oversight and automated internal and external databases to analyze and verify account data.

This translates into real results. We recently detected fraudulent activity within one of our clients’ funds. As one of our fraud analysts was reviewing daily unusual activity reports, he detected an individual had opened a number of different accounts within a narrow time period. As the analyst explored further, he discovered the accounts’ addresses was a prison and the shareholder was an inmate. He escalated the findings to U.S. Bancorp Fund Services’ AML Officer and Fraud Prevention Coordinator who found the shareholder was making fraudulent claims to assets under an assumed identity. Without the expertise of our front line associates and the integrated operations of our AML and fraud departments, this scheme may never have been uncovered and reported.

The Result

Our Transfer Agent AML and Fraud Department has detected and prevented more than $20 million in fraudulent activities since 2000. By focusing on areas of greatest risk, we are able to eliminate financial crime with a customer-centric perspective.

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