Account management fraud risks: I “think” I know who I’m dealing with…
Risk of fraudulent account activity does not cease once an application has been processed with even the most robust authentication products and tools available.
These are a few market dynamics are contributing to increased fraud risk to existing accounts:
– The credit crunch is impacting bad guys too! Think it’s hard to get approved for a credit account these days? The same tightened lending practices good consumers now face are also keeping fraudsters out of the “application approval” process too. While that may be a good thing in general, it has caused a migratory focus from application fraud to account takeover fraud.
– Existing and viable accounts are now much more appealing to fraudsters given a shortage of application fraud opportunities, as financial institutions have reduced solicitation volume.
A few other interesting challenges face organizations with regards to an institution’s ability to minimize fraud losses related to existing accounts:
– Social engineering — the “human element” is inherent in a call center environment and critical from a customer experience perspective. This factor offers the opportunity for fraudsters to manipulate representatives to either gain unauthorized access to accounts or, at the very least, collect consumer and account information that may help them perpetrate fraud later.
– Automatic Number Identification (ANI) spoofing — this technology allows a caller to alter the true displayable number from which he or she is calling to a falsely portrayed number. It’s difficult, if not impossible, to find a legitimate use for this technology. However, fraudsters find this capability quite useful as they try to circumvent what was once a very effective method of positively authenticating a consumer based on a “good” or known incoming phone number. With ANI spoofing in play, many call centers are now unable to confidently rely on this once cost-effective and impactful method of authenticating consumers.