Payments Security

The FraudClassifier Model: A Collaborative Journey to Classifying Fraud

Introduced by the Federal Reserve in June, the FraudClassifierSM model provides an intuitive approach to classifying fraud. Explore our video series below to hear from work group members and the Fed team who helped create the model.

The model was developed by the Fraud Definitions Work Group to help address the industrywide challenge of inconsistent classifications for fraud involving payments. It offers a holistic picture to help organizations better understand the magnitude of fraud involving payments.

“The model will help you understand fraud trends that you did not know you had in your institution,” said Rene Perez, director, product management with Jack Henry & Associates.

The key advantage of the FraudClassifier model is the ability to classify fraud independently of payment type, payment channel or other payment characteristics.

“Implementing the model was fairly simple… For us, it was just a spreadsheet on a shared drive, and we’re able to put that out to the entire enterprise,” says Roy Olsen, executive vice president, American National Bank & Trust.

We encourage you to learn more about the model and projected benefits of voluntary adoption. Be sure and register to access the full model with supporting definitions and additional resources as a member of the FedPayments Improvement Community.