Identifying and Averting “Festive Fraud”

Bankers emphasize security measures this holiday season

By Rob Foxx, CCBTO

What should be a time of joy and celebration for all can quickly turn into a time of stress and panic. Scams come in many forms — from seemingly innocent to incredibly sophisticated. Knowing these scams and how they work will not only help you defend yourself and your loved ones but assist you in identifying threats to your customers this holiday season.

As technology continues to advance, so too do the number and intricacy of scams we encounter. During the holiday season, consumers are more likely to see a rise in “festive fraud” — or a spike in fraudulent activity associated with holiday shopping.

While porch pirating schemes and fake gift card offers rise during this time of year, bankers should be aware of bad actors attempting to put individuals, businesses, and financial institutions at risk.

Keeping Your Bank Secure

Cybercrime continues to be one of the greatest threats and most expensive forms of fraud to banks across the country. Unfortunately, common schemes can range from phishing or ransomware attacks to identity theft. Schemes which are often disguised as seemingly innocent links or exciting holiday discounts.

Like consumers, banks too face a heightened risk for fraudulent activity at the end of each year. As the holidays quickly approach, bankers should beware that fraudsters not only take advantage of the generosity of the season, but target businesses and offices that may be understaffed. It is critical that individuals remain attentive and leery of unexpected solicitations.

Skepticism is often the first line of defense against bad actors and now’s a great time to ensure every member of your team is prepared for potential threats and that they know how to mitigate the risk. IT professionals and bank leaders should assist all staff members in understanding the various cybercrimes, what they may look like, and how they can impact the bank and its customers.

Make certain that your staff has secure passwords, is using multifactor authentication (MFA), is leery of unknown websites or email addresses, and knows how to report an incident.

In addition, banks should take a moment this holiday season to verify that the organization’s detection methods are properly operating and, in the event of a cyberattack, have a clear response plan. Cyberattacks are most often the result of technological vulnerabilities and human error — make sure your bank is prepared to mitigate this potential risk.

Identifying Consumer Fraud

As fraudulent activity becomes increasingly more difficult to identify, bankers have taken on an important role in educating their customers of, and protecting them from, various schemes.

This holiday season, bankers should advise their customers to be leery of “too good to be true” deals, gift cards from unreputable sellers, urgent or unexpected requests, and fake charities. Consumers and bankers alike should never give out personal information without verifying the legitimacy of the website or person requesting said details.

If a customer reports a fraudulent scam, bankers should not only ensure the individual impacted reports the incident to the local law enforcement, Federal Bureau of Investigation (FBI), and Federal Trade Commission (FTC), but remind them that falling victim to the increasing number of sophisticated fraudsters consumers encounter each day is nothing to be ashamed about.

Foxx is director – infosec and IT audit services for FIPCO, a WBA Gold Associate Member.