Top 10 Fraud Trends

Many CUs continue to be burdened by data breaches.

July 15, 2011
KEYWORDS credit , fraud , social
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Top 10 Fraud Trends

Skimming, data breaches, and social engineering are three of the biggest threats credit unions will face in 2011, according to “Top 10 Fraud Trends of 2011,” a white paper from Card Services for Credit Unions (CSCU).

CSCU reports the biggest fraud trends credit unions face are:

1. Card not present fraud. While large online merchants have standard fraud checks in place—address verification, card security verification, and credit card authentication—others don’t, leaving the onus of fraud prevention and detection on issuers.

2. Skimming. Recent attacks have ranged from traditional ATM skimming and incidents at merchant point-of-sale systems to skimming devices installed at gas station pumps.

3. Data breaches. Many credit unions continue to be burdened by the aftermath of the Heartland data breach. Credit unions should explore any data compromise solutions or services their card processor offers.

4. Social engineering schemes. Text phishing and voice over Internet protocol (VoIP) phishing (smishing and vishing, respectively) are newer forms of social engineering using the mobile and VoIP channels.

5. Fraud as a service. Criminal organizations are creating and selling fraud schemes as a “service,” essentially commoditizing and managing fraud as a for-profit business.

6. Social networking. The correlation between fraud and social networking is nothing to take lightly. Research has found that people using social networking for five or more years are twice as likely as newer users to suffer identity fraud (6.9% versus 3.2%).

7. Mobile malware. Software flaws within common mobile browser platforms provide the first credible opening for widespread mobile malware in the U.S. The security technology company McAfee noted a 46% increase in the amount of malware created for mobile devices from 2009 to 2010.

8. ATM malware. ATM malware aims to capture account numbers and personal identification numbers from the machine’s transaction application and deliver it to the perpetrator on a receipt printed from the machine in an encrypted format, or to a data storage device hidden in the card reader.

9. First-party fraud. First-party, or “friendly fraud,” typically involves a member obtaining a credit card with no intention of repayment. In some cases, first-party fraud perpetrators may mask their true identities.

10. Unknown future. Fraudsters may turn to credit unions and other smaller financial institutions in response to tougher antifraud measures by large providers.

Visit the CSCU website for more information.

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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