Fraud Hotline Guidance on Implementing a Fraud Hotline
FIL-80-2005 August 16, 2005
The FDIC is providing guidance to financial institutions on implementing a fraud hotline to minimize potential and actual fraud risks as part of a bank's governance and enterprise risk management program.
The FDIC encourages financial institutions to consider the benefits of implementing a fraud hotline as a confidential communication channel to identify fraud and reduce fraud-related losses.
The Association of Certified Fraud Examiners – in its "2004 Report to the Nation" – stated that organizations without mechanisms to report fraud suffered financial losses that were more than twice as high as organizations with anonymous fraud-reporting mechanisms.
Awareness of the fraud hotline by employees, customers, contractors, service providers, suppliers and other third parties is an important component in ensuring a hotline's effectiveness.
Confidentiality of tips reported on fraud hotlines must be guaranteed to ensure that those reporting suspected wrongdoing can do so without fear of retribution or reprisal.
FDIC-Supervised Banks (Commercial and Savings)