Credit Infocenter

Early Warning Services, LLC 

By: Staff

Last Updated: July 12, 2010

Early Warning Services,LLC was formed to help eliminate fraud in the financial systems. The roots of this company were formed over 20 years ago and is currently owned by Bank of America, JPMorgan Chase, and Wells Fargo. This bank ownership offers openness and sharing of information between these institutions to help fight fraud.

Early Warning Services is based in Scottsdale, Arizona. Employees might be described as playing a role of "risk detectives," seeking to keep their clients (banks, brokerages, credit unions) from losing money in ID theft scams or bad checks. According to their website, employees use collective knowledge and best practices in fraud management from leading financial services organizations to fight identity, deposit, and payment fraud. This intelligence is delivered through a suite of Early Warning fraud solutions, and may result in billions of dollars in annual loss avoidance.

According to Paul W. Finch, Early Warning Services chief executive officer, the company estimates it is saving it's financial services clients more than $1 billion annually in fraud losses. Their website,, indicates that in 2006 they have screened 42.3 million identities and processed over 2.1 billion inquires. According to Finch, banks want to be more open with each other about the internal and external frauds they face. By joining forces, openness in information sharing is facilitated, and efforts to thwart frauds are more quickly recognized. As fraud continues to reach new levels of sophistication, the speed which current and accurate information is integrated in the processes that detect, prevent and deter fraud becomes critical.

The financial service industries that might benefit as Early Warning Services clientele would include financial institutions (retail banks/savings and loans/thrifts), brokerages, mutual fund companies, credit card issuers, check acceptance companies and others. Early Warning Systems has specific solutions that are tailored for each industry, but in general attempts of fraud will fall into one of three categories; deposit, payment, and identity fraud.

Early Warning Services promises to provide solutions to prevent each of these three fraud methods using a database provided by "various organizations" which shares their most current information on accounts, transactions, and identities. The following are the four major "Solutions" or programs that they offer clients:

  1. DEPOSIT CHEK:  For physical and online items presented for deposit or payment at financial institutions. Performs validation and status verification of the payer's checking account. Responses help detect fraud, prevent losses and expedite funds availability decisions.
  2. IDENTITY CHEK:  Distinguishes high-risk individuals from profitable customers with the end goal of opening more "good" accounts and reducing costly write-offs. This service identifies applicants with a prior history of fraud and/or account abuse while also performing identity verification and compliance list screening.
  3. PAYMENT CHEK:  Identifies high-risk credit card remittance payments made from checking accounts. For both physical and online items, this service validates an account's existence, reports it's status and whether the payer's name, address and other elements match the account.
  4. INTERNAL FRAUD PREVENTION SERVICE:  Available to financial services organizations, it provides notification of job applicants and employees that have been released by another institution because they knowingly caused or attempted to cause financial loss.

What Does This Mean to Consumers?

Well, provided the data in their system for an individual consumer is accurate, this seems a positive (for responsible individuals without negatives in their past financial account history). If it helps them save money, perhaps it will be passed on to us as consumers somewhere down the road. Ownership and control of this company by the banks themselves will no doubt encourage sharing of information for fraud control, bridge some of the competition gaps and perhaps ultimately reduce costs for all consumers....