By Alan Nevels
Sep. 15, 2022
Falling victim to fraud or a scam can be an embarrassing and costly experience. According to a CNBC report published earlier this year, consumers reported fraud losses of more than $5.8 billion in 2021, with imposter fraud and investment scams leading the pack.
Sadly, the payments industry has seen a specific target on seniors, who tend to be the most vulnerable, have larger nest eggs, and are more trusting and unaware of the deceitful fraudster tactics. And while seniors are often targeted, anyone can fall prey to criminals looking to gather as much personal identifiable information (PII) as possible to access card and bank accounts and take over or create identities and perpetrate fraud.
Surveys indicate that more than 76 percent of Americans trust their financial institutions more than they trust the federal government. This offers community banks the best position for helping to protect their customers and their bank from fraud scams. Efforts toward fighting today’s fraud trends increasingly involve customer engagement. Education is imperative, so that your bank customers are better equipped with the tools and knowledge they need to recognize red flags.
Fraudsters are employing both old and new methods to commit fraud. Some are so sophisticated that it has become a challenge to distinguish legitimate requests from fraud. Below are some common fraud trends and scams that your customers should be aware. All instill a sense of urgency for customers to hand over personal identifiable information, which is then used to steal money or the customer’s identity.
A fraudster claiming to be a representative from a bank, credit card, utility, or mobile phone company, will falsely state that there is an urgent matter, such as a missed payment, or erroneous personal details that are halting transactions.
This scam usually involves a deceptive call from a bogus credit card company or loan servicer offering a lower monthly payment, a change to a better APR, or debt management services for a minimal one-time fee that must be paid before ending the call.
Bad actors pretending to be IRS representatives claim that there is a discrepancy with PII on file and that payments or IRS credits cannot be made without providing details, such as a full social security number, mother’s maiden name, or address verification.
Seemingly legitimate emails that appear to come from familiar companies, banks, or persons claim there is an emergency that needs immediate attention. There is typically a strong push to click on an embedded link to “fix the issue.”
This popular payment tool is providing a convenient rail for authorized push payment fraud. It allows fraudsters to impersonate friends or family members, to solicit urgent payments under the guise of avoiding immediate arrest or being stranded.
While there’s no full-proof way to avoid being targeted, here are a few tips to remind customers of how they can reduce their chances of falling prey to fraudsters:
Exercise caution when sharing personal identifiable information to callers requesting immediate action.
Remind them that banks and government agencies do not solicit personal identifiable information unless the inquiry was initiated by the customer.
Be diligent with how much PI and regular routines are shared over social media sites and apps. Fraudsters comb these sites for information to create fake identities.
Be certain you are paying the correct person(s) or entities when executing a Real-Time Payment transaction.
Be suspicious of links embedded in emails or text messages.
Be mindful of spelling errors in messages or websites, which can be a red flag that they are not legitimate.
Shred any unwanted mail, documents, canceled checks, or credit applications. Dumpster diving remains one of the top five methods for stealing identities.
Review billing and banking statements immediately each month for discrepancies and report any unexplained charges.
The adage “knowledge is power” holds true. Customer education is critical to today’s fraud prevention strategies. Knowing the red flags of associated fraud scams can help defend against fraud losses.