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F e d e r a l Re s e r v e Ba n k o f D a lla s DALLAS, TEX A S 75222 C i r c u l a r No. 77-38 M a rc h 14, 1977 A T T E M P T S T O P ER PE TR A TE F R A U D U L E N T TR A N S F E R S OF FUNDS TH R O U G H T H E FE D E R A L RESERVE C O M M U N IC A T IO N S S Y S TE M TO TH E E X E C U T IV E O FFIC E R OF A L L NONMEMBER BANKS IN TH E E LE V E N TH FEDERAL RESERVE D IS T R IC T : It seems a p p a re n t th a t co n tin u in g attempts a r e b e in g made to p e r p e tr a te fr a u d u le n t tr a n s fe r s of funds th ro u g h the F e dera l R e s e rv e Communications S ystem , s p e c ific a lly in the a rea of w i r e tr a n s fe r s of fu n d s . W h ile it is recognized that non m ember banks a re not d i r e c t l y in v o lv e d w ith the in itia tio n or in itia l re c e ip t of tr a n s fe r s of fund s th ro u g h the Fe d era l R e s e rv e Com m unications S ystem , it is b e liev e d th a t the impact of fr a u d u le n t tr a n s fe r attempts may e a s ily be fe l t , d ir e c t ly o r i n d i r e c t l y , th ro u g h o u t the e n tir e b a n k in g system fo r both m em ber and nonmem b e r b a n k s . T h e r e f o r e , since nonm em bers may indeed be affected by a fr a u d u le n t tr a n s fe r of funds re c e iv e d by its c o rre s p o n d e n t th ro u g h the Federal R e s e rv e Com m unications System , it is suggested that nonm em ber banks r e v ie w t h e i r in te rn a l p ro c e d u re s r e g a r d in g w ir e tr a n s fe r s of funds operations and p r o c e d u re s . T h e follow in g suggestions a r e p r o v id e d for y o u r consid e ra tio n w h e n r e v ie w in g y o u r o p e ra tio n s . • T e le p h o n e requests for tr a n s fe r s from y o u r customers should be e ith e r a uth e ntic ate d o r v e r ifie d in some fashion. • Employees should r e p o rt a ny tr a n s fe r re q u es t that seems unusual o r out of the o r d in a r y to b a n k m anagem ent. • Employees should be p o s itiv e that it is t h e ir c o rre s p o n d e n t bank c a llin g w hen r e c e iv in g incoming tr a n s fe r s of funds n o tific a tio n . If th e re is a n y question that a telephone notificatio n from a c o r r e s pondent b a n k is unusual o r p o te n tia lly q u e stio n ab le in a ny m a n n e r, e . g . , an u n u s u a lly larg e o r t h i r d p a r ty t r a n s f e r , a r e tu r n telephone call to th e c o rre s p o n d e n t b a n k should be made fo r v e r ific a t io n . • Funds fo r incoming tr a n s fe r s should not be paid out to customers unless e ith e r h a rd copy o r p o s itiv e notification has been re c e iv e d from y o u r c o rre s p o n d e n t b a n k o r p o s itiv e id e n tific a tio n has been made. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - • 2 - Employees should be in s tru c te d not to g iv e out a ny inform ation on in te rn a l tr a n s fe r s of fund s p ro c e d u re s or v e r ific a tio n p ro c e d u re s . Y o u r cooperation in h e lp in g to in s u re the in t e g r it y of the tr a n s fe r of funds process as it relates to y o u r b ank w i l l be a p p r e c ia te d . S in c e r e ly y o u r s , R ob ert H . B o y k in F ir s t V ic e P re s id e n t
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