By Scott Birrenkott
Data released by the Federal Trade Commission (FTC) in 2023 shows that consumers reported losing nearly $8.8 billion to fraud in 2022; an increase of more than 30% over the year prior. Those are sobering numbers, but WBA’s Financial Crimes Committee would be quick to point out that figure only includes fraud that was reported.
The WBA Financial Crimes Committee is comprised of fraud officers, risk managers, and security specialists. The Committee serves to inform and educate the Wisconsin banking industry, law enforcement, and the general public on the changing security and criminal threats to Wisconsin’s financial sector while also helping to develop solutions. Of the common fraud trends seen in Wisconsin — including phone or online scams and ATM skimmers — felony lane gangs remain difficult for law enforcement and bankers alike to identify.
A “felony lane gang” refers to a group of organized criminals that target banks through use of the far drive-up lane. While these groups are not new, they have recently been active in Wisconsin. The group travels across the country to recruit individuals for smash-and-grab petty thefts. These individuals will steal cash, checks, and personal identifying cards such as driver’s licenses, credit cards, and debit cards that are later used to impersonate the victim and conduct fraudulent transactions.
Typically, bad actors use rented, late model vehicles with stolen Wisconsin license plates and only visit branch locations away from the customer’s address to avoid being spotted. These individuals dress the part by wearing wigs and costumes to resemble the individual whose identity they have stolen. The actor may also wear covering garments, such as sunglasses, hats, cowls, and coats to make identification more difficult. Staff should be encouraged to closely compare the likeness of the person conducting the transaction to the identification presented.
While WBA’s Financial Crimes Committee has reported that it is most common to see bad actors use drive up lanes to commit fraud, members of felony lane gangs have been known to enter a branch lobby as well.
Being aware of typical security questions, bad actors will have two forms of identification available. These individuals may often appear anxious or rushed if confronted, or if they cannot accurately answer security questions. Paying careful attention to the second form of identification presented, bankers should ensure that it has not previously been closed or hot-carded.
Depending on branch locations and overall risk tolerance, a bank might also consider establishing additional identification procedures, perhaps for transactions that exceed a certain dollar amount.
The Committee recommends encouraging staff members to follow their bank’s procedures on suspicious transaction activity to minimize losses. Additionally, bankers should work closely with their customers to report the loss of access devices, account information, or other identifying information. Then, a system notification or warning to a relationship profile can be added to flag any potential felony lane gang activity.
As technology, methods of business, and commerce evolve, fraudsters are continually developing their methods to become increasingly more convincing. In this way, the group stresses the importance to monitoring fraudulent tactics through alerts by the Financial Crimes Enforcement Network (FinCEN), news sources, and information sharing.
WBA would like to thank the Financial Crimes Committee for their assistance in informing this article.