Thursday, July 29, 2010

Top 5 Fraud Threats

Malware, Breaches Share List with Check & Mortgage Fraud
Online crimes are increasing in complexity and reach, but they represent only a portion of the fraud trends that banking institutions will face over the next 18 months.
According to - despite high-profile incidents of ACH fraud and data breaches impacting financial institutions -- counterfeit checks and mortgage fraud still rank among the top fraud threats.
  1. Malware and Botnets -- These software agents or robots that take over a user's computer are often the root causes of commercial payments fraud, i.e. corporate account takeover. Malware has gotten on the computers of commercial customers and financial institutions, thereby compromising their log-in credentials and causing the criminals to be able to commit fraud by moving money through wire transfers or ACH.
  2. Phishing -- The crime has evolved from badly-written, bogus emails to well-crafted assaults via e-mail, telephone and text message. My worry is the next way that criminals will change phishing and be creative via social engineering.
  3. Data Breaches -- Despite that most data breaches have occurred on the merchant and payments processor sides of the business, financial institutions are still deeply impacted by these losses. They have to reissue cards and deal with the aftermath of credit card information getting out there, and how that can lead to the identity theft of their customers.
  4. Counterfeit Checks -- The circulation of checks continues to drop, but counterfeit check fraud remains prevalent. Cashier checks and bank official checks are most often the targets. [Criminals] understand Reg CC and know that those checks have faster funds availability, which allows them to get their money out of the scam faster.
  5. Mortgage Fraud -- These crimes committed against financial institutions, as well as mortgage rescue scams that affect consumers and mortgage holders, continue to rock the financial market.

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