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  1. Resource Center
  2. Allied Insights
  3. 2022.12.14_Naughty List of Fraud

Naughty List of Fraud

  1. Resource Center
  2. Allied Insights
  3. 2022.12.14_Naughty List of Fraud
By Allied Solutions,
December 14, 2022
Cyber criminals are hard at work during the holidays seeking to steal personal data, money, or both. In this blog we’re predicting the top forms of fraud exposures this holiday season and giving practical tips to keep you and accountholders protected.
The Bad Guys Are in the Holiday Spirit

The holiday shopping season presents an abundance of opportunities for the bad actors to strike. Cyber criminals are hard at work during the holidays seeking to steal personal data, money or both. There are several prominent, repeat scams to look out for this holiday season.

The Naughty List: Holiday Fraud Scams

Here are the top fraud exposures for your internal teams and accountholders to be wary of during the holidays.

The fraud naughty list image1. Social Engineering: Social engineering (or phishing) takes on many shapes and forms, but the ultimate goal is to coerce personal information to steal funds from the victim. These scams are getting more and more clever and fraudsters are willing to play the long game of collecting data and stealing money, even if that means they have to wait to use the data or funds till after the holidays. Phishing is predicted to be the top fraud exposure this holiday season.

2. Payment app fraud: Payment apps include Venmo, Zelle, PayPal, Cash App and others. In recent years this type of fraud has grown over 700%. Amazon recently rolled out Venmo as a form of payment – the first platform to do so. While this may be a convenience for shoppers, it opens doors for increased fraudulent activity. 

3. Charity fraud: Preying on the holiday spirit of generosity, bad actors create false charities or causes to steal money. Depending on the type of transaction, these funds may not be traceable or refundable. 

4. Delivery and tech support scams: These types of scams occur when a buyer pays for a good that is never delivered or a technical support service that is faulty. Non delivery scams total over $337 million in losses and tech support scams amount to over $347 million in losses. While tech support scams primarily target the elderly, non-delivery scams do not target any particular demographic. 

 

Watch this video for a deep dive into what's trending in fraud in the financial sector

 

The Nice List: Fraud Prevention Tactics for Accountholders

As the fraudsters get cleverer, it’s imperative to be more vigilant. Help your accountholders stay protected and head fraud off at the pass with these practical steps:

The night list for fraud prevention tactics

1. Practice good cybersecurity hygiene. Whenever possible, encourage accountholders to:

    • Use strong, hard-to-guess passwords and never publish information on social media that could be used to guess passwords or security questions
    • Always personally confirm with family members before wiring any money
    • Enable MFA (multi-factor authentication) on online retail and banking accounts
    • Only shop on websites with the lock symbol next to the URL
    • Use a credit card (instead of debit card) whenever possible, especially for online transactions
    • Stick to payment apps (Venmo, PayPal, Cash App, Zelle, etc.) for friends and family only
    • Never provide personal information over phone, text, or email if the source seems even slightly suspicious
    • Use private networks for shopping
    • Validate tech support services by Googling their name and confirming a legitimate website
    • Enable text fraud/transaction alerts 

2. Beware of using remote USPS mailboxes. More and more, bad actors are dressing up as mail carriers to steal envelopes containing cash, checks and personal information from blue, freestanding USPS mailboxes. Once stolen, they whitewash checks and change the recipient’s name and amount prior to depositing. Especially during the holidays, take all mail directly to the post office. Additionally, sign up for Informed Delivery, a customizable service that allows users to see photos of their mail days before it is even delivered.

(Bonus tip: Ensure that your financial institution uses color remote deposit capture to better catch check washing.)

3. Step up authentication measures. Your accountholders deserve your additional vigilance during the holidays. Some holiday season best practices include performing additional authentication for wire requests, loan approvals and suspicious transactions (typically those entered without a PIN and are under $50). Authentication for account access should be required online, over the phone and in-branch.

 

Thwart holiday fraud scams with this checklist. Download now.

 

Stay Protected During the Holidays

Though it’s on our wish list, fraud is not going away this holiday season. Make sure that your accountholders know how to identify signs of fraud. Above all, it’s crucial that your institution is protected with advanced and customized cyber liability insurance. Learn more here.

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