BAFT, the American Bankers Association’s global transaction banking subsidiary, today released templates for fraud indemnity agreements that member banks can use in attempting to recover funds fraudulently transferred from a customer’s bank to a different bank. Available to BAFT members only, the documents include annotated and fillable versions of both comprehensive and limited liability indemnity agreements, which banks can choose according to their needs.
The templates come as criminals deploy increasingly sophisticated frauds, including impersonating customers and ordering irreversible wire transfers. “In addition to working through law enforcement or a potentially lengthy chain of correspondents, banks needed a quick and effective method of thwarting theft through wire fraud,” said BAFT SVP Samantha Pelosi. “These pre-negotiated agreements will be a critical tool for a bank seeking to incentivize its counterpart to act when time is of the essence.”