Call centre fraud: Why financial institutions need to defend themselves

Fraud on the phone channel is on the rise. Our recent report, which analysed over 10 million calls made to financial institutions in the UK and US, found that in 2015, 1 in 700 calls to UK financial institutions were fraudulent. This was almost double the rate that the US experienced - 1 in 1700 - during the same period.

One of the main reasons for increased call centre fraud in the UK is because most businesses have been focusing on improving their cyber defences. As attacks online grow more sophisticated, and with these breaches continually hitting the headlines, organisations have started to rethink their defence strategy against fraud.

Call centre fraud explained

Call centre fraud is defined as any interaction between a criminal and a call centre agent. Our report shows that a criminal will make up to five calls before completing a fraudulent transaction in order to get as much information from agents as possible to then use at a later date across any channel.

What we need to remember is that call centre agents aren't fraud experts. They are tasked with providing genuine customers with a great experience and as such are being targeted by criminals making them the weakest line of defence in any attack. Fraudsters who target call centres look and sound just like legitimate callers to the ear of a call centre agent. The use of caller ID spoofing tools and voice distortion can make fraudsters appear even more legitimate.

Mobile: A popular channel for call centre fraud

What is interesting about the analysis of calls in the UK is that mobile phones are the most popular device used to launch fraud attacks. Fraudsters use mobile phones up to 64 per cent of the time. This compares to legitimate callers who use mobile only 38 per cent of the time, and are more likely to call their financial institution over a landline.

Fraudsters prefer mobile phones because mobile calling is very cheap. There has also been a marked rise in mobile because of the wide availability of fraud-enabling apps like caller ID spoofing and voice distortion. Never has it been so easy to arm a criminal to dupe an unsuspecting call centre agent, whose primary objective is to provide a good customer experience.

Spotting the fraudsters

But there are certain risk factors that separate fraudsters from legitimate callers. In fact, fraudsters favour different calling devices, and call from different geographies. Call centres must not only learn the risk factors that can indicate a fraudulent call, but must also find technology solutions that can analyse incoming calls for these risk factors.

By equipping agents with solutions to better identify a suspicious call quickly, they can also prevent the pre-fraud data gathering activities that lead to increased fraud across the phone and other channels. Failing to integrate this type of capability into defence strategies is not an option. It is fast becoming the go to tactic for criminals, and so financial institutions cannot afford to neglect it.

Matt Peachey, General Manager, Pindrop EMEA