BY BILL PRICHARD
Is your credit union prepared for the sophisticated new ways in which today’s fraudsters are taking over accounts? Constant vigilance and surveillance are critical to detecting and preventing such fraud from transpiring. These strategies will help your CU minimize the losses it incurs from fraudulent activity.
Account takeover fraud – which occurs when a criminal gains unauthorized access to an account via identity theft – is growing by leap and bounds.
According to a March 2016 Javelin Strategy & Research report, “Mitigating Application Fraud from Synthetic Identities,” fraudsters stole the identities, in one way or another, of some 1.5 million consumers last year, up from 700,000 in 2014.
Javelin reports that last year, seven million individuals reported having their Social Security numbers breached within the prior 12 months, 63 percent more than in 2014.
A Boost for Fraudsters
Much of this harvested data is directly applicable to account takeover and can even assist fraudsters in answering dynamic challenge questions such as the name of a favorite pet. To evade detection, the perpetrator often reroutes communication about the account, keeping the victim in the dark so the thievery can continue longer. Affected accounts can include credit cards, checking and savings accounts, brokerage accounts and store loyalty rewards accounts.