Financial fraud technology has continued to expand, too.
The methods criminals use to scam members are nearly always at least a step ahead of current fraud prevention techniques and tools. It’s unfortunate this is the case. But we shouldn’t be surprised. Wherever there’s money, there’s likely to be someone who wants to cheat you out of it.
Regardless of a given scam’s digital sophistication, each fraud attempt has a common foundation with all other fraud techniques. Financial fraud virtually always begins with a breakdown of personal authentication. In other words, with apologies to the classic movie, Cool Hand Luke, what we’ve got here is a failure to authenticate.
More to the point, here’s a recent example of how risky current authentication practices can be.
A CU member wanted to withdraw a larger-than-normal amount of cash from an ATM. So, he did what any of us would do. He called the CU to request a limit increase. When he reached a live person, he was asked first for the last four digits of his SSN. Then, while still on the phone, he was handed around to other CU staffers.
Each one asked for personally identifiable identification of one type or another. And most likely, none of them realized every step of this standard process exposed the member to fraud risk.