July 26, 2019
Trends in Insurance | How Can We Prevent Fraud?
Across the board, insurers found they were experiencing a huge…
With $14 billion lost annually to phone fraud, the call center remains a common target to fraudsters. Legacy authentication methods including caller identification, knowledge based authentication questions (KBAs), and ANI verifications no longer stand up to sophisticated attacks. Using these outdated solutions costs call centers $0.33 per call, adding up to $8 billion each year. With 61% of fraud originating from the call center, companies have not only been experiencing alarmingly high fraud costs, but a spike in fraud loss since just last year with a 113% increase.
In an effort to reduce fraud, three industry leaders onboarded Pindrop solutions.
The recent transition to EMV (chip) card technology in the U.S. has allowed for more secure purchases in store, however, it has introduced a rise in card-not-present (CPN) fraud. The EMV technology has created a greater sense of security, causing fraudsters to refocus their aim and target less protected channels, such as the call center. According to Aite Group, an independent research firm, 72% of executives expect call center fraud loss to continue to grow, with four billion in counterfeit card fraud moving into the phone channel. This movement to the call center has not only damaged customer trust in retailers and the overall customer experience, but has additionally expressed a growth in chargeback fees – which can pose a larger risk than fraud loss itself.
One leading retailer partnered with Pindrop to minimize chargebacks and preemptively deter fraud attempts. By doing so, the retailer expected to see a fraud reduction of over ten million dollars.
A leading U.S. bank found that fraud attempts on their call center were at an all-time high, with expectations for fraud to continue rising. The bank considered adding more KBA questions, but rejected the idea, as it would reduce call speed. Voice biometric-based solutions were contemplated, but not pursued as it proves to be a poor fraud detection solution, and only protected about 20% of the bank’s accounts. After taking a look at Phoneprinting™, the bank decided to join Pindrop in the fight against fraud.
The leading U.S. bank was able to reduce call center fraud losses by 70% by identifying three times more fraudulent phone calls than the bank’s legacy solutions. In the first few months, the bank was able to stop several thousand fraud calls, saving millions of dollars, while simultaneously lowering operations costs, improving customer experience, and reducing reputation risk.
The life insurance industry is vulnerable to fraud attacks, especially in regard to claims fraud. Life insurance agencies experience three times higher fraud exposure compared to other financial institutions. In recent years, several top life insurance agencies discovered another type of attack that originates from the call center – account takeovers. Fraudsters are able to manipulate call center representatives by using social engineering tactics to impersonate clients, pass knowledge based authentications, and ultimately gain access to clients’ accounts. Once access is granted, the fraudster is able to steal funds by either taking out a loan against the policy or by surrendering the policy for cash. This type of attack not only causes monetary loss and stress for the client, but also breaks the clients’ trust in the agency.
With the help of Pindrop’s Phoneprinting, one of the top five U.S. life insurance agencies were able to reduce call center account takeovers dramatically while protecting their brand reputation and improving the overall customer experience.
Join the fight against call center fraud – contact us today.