August 29, 2018
A [Female] Voice of Concern
The number of people using digital assistants are growing by…
The UK is no stranger to phone fraud in financial institutions. The recent data compiled in Pindrop’s 2016 Call Center Fraud Report shows that 1 in every 700 calls made to enterprise call centers in the UK is fraudulent. This is over two times higher than the fraud call rate in the US.
A major factor that’s causing the high levels of fraud in the UK is the chip card technology implemented in 2004. Because chip cards make it harder to commit card-present fraud, attackers began to move towards card-not-present channels, notably the call center, to continue making fraudulent transactions.
This shift gives the US valuable insight into the future of call center fraud due to the recent transition of chip-and-pin cards stateside. According to the Aite Group, fraud attacks in the call center grew 79% in the UK following the chip card roll out.
72% of fraud calls to financial institutions originate within the UK. The US sees a much lower number of domestic calls at only 48%. Again, the high percentage in domestic fraud calls is linked to chip cards. When chip cards were first introduced in Europe, card-present fraudsters moved to non-physical attacks like call center fraud, rather than relocate out of the country. In addition to the UK, similar trends have been seen in other European countries who have implemented chip cards. France, for example, saw an increase in domestic card-not-present attacks by more than 360% between 2004 and 2009 (Iovation, Fighting CNP Fraud: 5 Things to Consider).
UK financial institutions see 64% of fraud calls coming from mobile devices, while the US only sees 37%. In the UK, it is easier to program mobiles phones to show a restricted caller ID. In fact, 70% of fraud calls in the UK use a restricted caller ID rather than spoofing a phone number, a common trick in the US.
The state of call center fraud in the UK gives us a glimpse into the future of fraud in the US. Phone fraud has risen 45% since 2013 stateside. Fraudsters will go down the path of least resistance, which in financial institutions is the phone channel. As physical and cyber security increases and data breaches become more frequent, bad actors exploit data over the phone. To combat fraud, financial institutions should implement security solutions around authentication and voice biometrics to ensure the safety of their customers.