Businesses Must Take Proactive Stance to Financial Crime | #phishing | #scams


As we all settle into our digital lives, the internet has become not only our workplace but also where we learn, shop and socialize.

It shouldn’t come as a surprise, then, that cybercriminals are seizing on the moment. Indeed, it has reached a point where very few people can say they haven’t been targeted in some way or another. The Federal Trade Commission reported that imposter scams and fraud related to online shopping cost U.S. consumers about $1.4 billion in 2020, and indications are that fraud activity hasn’t abated much this year, either.

“It’s really unprecedented right now,” Todd Raque, financial crimes compliance and anti-money laundering executive at Featurespace, told PYMNTS in an interview. “As we come out of the pandemic, scams are on the rise, and I think that will continue.”

Same Scams, Different Mediums

Scammers are up to their old tricks, Raque said. Phishing remains as prevalent as ever and can always find reliable targets.

But he said the rise in online shopping means consumers also run the very real risk of inadvertently buying counterfeit goods. He knows only too well because he recently fell victim to such a scam himself. Having just moved to Florida, Raque said he was searching online to buy sunglasses when he came across what looked like a great deal for a pair of Maui Jim shades.

“I ordered a pair for my wife and I, and it turned out to be a fraudulent website where it was one letter off when I got billed,” he said.

Raque said he counts himself lucky — he only lost out on the shades. He warned that many bogus websites would attempt to steal a consumer’s information and leverage that elsewhere in even bigger scams.

Read more: Supply Chain Shortages Fuel Fraudsters With Fake Storefronts To Trick Holiday Shoppers

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Time to Get Wiser

Asked what can be done to prevent fraud, Raque said educating organizations and consumers has to be the No. 1 priority. People and organizations both need to be aware of all the popular scams and schemes fraudsters have in their arsenal.

Raque said the financial services and payments industries are especially at risk of fraud. When you take away that human interaction, you lose a key piece of the puzzle. So there’s a more urgent need for people to be informed of the red flags. Training is required so that everyone has the right escalation path in case something happens, not only to help the institution but customers as well, he added.

“You need to get into a position where you’re being proactive, not reactive, and you need to get ahead of the curve,” Raque explained. “Technology is one component of that, but you also need to have a good foundational process that’s built on identifying emerging risks and typologies.”

More like this: Featurespace Patents Show Role Of Neural Networks In Finding Transaction Anomalies In Real Time

A Wider Net for Enforcement

Raque said the U.S. Financial Crimes Enforcement Network is currently working to implement big anti-money laundering (AML) reforms in the next couple of years that will likely oblige certain institutions to provide law enforcement with more useful information about the fraud and scams they encounter, beyond what fraud teams report today.

The initiative is all about taking the fight to financial crime, Raque said, so organizations need to start thinking more about the intersection of fraud and AML and how they can aid investigators.

“Institutions, retailers and especially regulated entities will need to start thinking about what impact that will have, and how they can pivot their programs to be more proactive instead of reactive,” he said.

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NEW PYMNTS DATA: AUTHENTICATING IDENTITIES IN THE DIGITAL ECONOMY – DECEMBER 2021

About:More than half of U.S. consumers think biometric authentication methods are faster, more convenient and more trustworthy than passwords or PINs — so why are less than 10% using them? PYMNTS, in collaboration with Mitek, surveyed more than 2,200 consumers to better define this perception versus use gap and identify ways businesses can boost usage.



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