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With the rollout of EMV chip cards in the United States shrinking opportunities for criminals to use counterfeit cards at the point of sale, fraud rings are turning their attention to customer-contact centers as a way to fraudulently order replacement credit and debit cards and take over consumer accounts.
More than three-fourths of financial institutions interviewed for a new Aite Group LLC report entitled, “Contact Centers: The Fraud Enablement Channel,” say fraud committed through contact centers is trending up. Of those institutions seeing a rise on contact-center fraud, 17% say fraud has jumped 25% or more in the past 12 months. Aite interviewed 25 executives at 18 of the 40 largest U.S. financial institutions for the report.
Criminals commit call-center fraud by posing as a credit or debit cardholder and using information about that cardholder stolen in a data breach or gathered through social media to answer questions intended to authenticate the customer. Once a criminal has successfully passed himself off as a customer he can request that a new person be added to the card account or ask for a replacement card, and even apply to open an entirely new credit card account using customer data.
“There’s $2 billion in counterfeit card fraud committed annually in the U.S., and fraud rings are not about to let that go because EMV is making it harder to produce counterfeit cards,” says Shirley Inscoe, a senior analyst at Boston-based Aite and author of the report. “Call centers are a weak link, which is why criminals are targeting them.”
One scam frequently perpetrated by fraud rings is to request a replacement card or to add a new cardholder to the account. Because a criminal knows the address of the person whose identity has been stolen, he can monitor the mail at the victim’s home and take the card from the mail the day it arrives.
“In many cases the victim is at work and not at home at the time of the mail theft, nor does he have any idea a new card is being sent so he is not looking for one in the mail,” says Inscoe.
Fraud rings also will reach out to contact centers by posing as a customer who is traveling and mistakenly has left his card at home, and needs the account number to make an online or phone purchase. By providing information used to authenticate customers, such as a Social Security number, the criminal can pass himself off as the customer without arousing the suspicion of the service agent. Once in possession of the customer’s account number, the criminal can use it to fraudulently make online purchases.
One weakness of contact centers is that because they can employ hundreds of service agents across multiple shifts, the odds of a criminal speaking to the same agent twice are long. That lessens the risk of detection, especially if the criminal fails to successfully pose as the customer on the first attempt. In addition, contact centers don’t always share information among their service agents about customers who failed to authenticate themselves, making it easier for fraud to go undetected.
“Criminals will make repeated attempts through the call center to get what they want,” Inscoe says.
Implementing voice fingerprinting or speech-recognition technology can give contact centers a leg up on identifying criminals, as the voice metrics for phone calls known to be initiated by criminals can be kept on file and used to screen incoming calls. Callers suspected of committing contact-center fraud can be transferred to a fraud-prevention specialist.
