November 20, 2019
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Criminals are targeting corporate call centers at an unprecedented rate, resulting in a 113 percent spike in the fraud rate in the last year, new data compiled by Pindrop shows.
Phone fraud has become one of the favored tactics for criminals as they look for less-risky and more-profitable avenues to get into targeted organizations. The phone channel typically is not as well-defended as other channels, including the web and in-person transactions, making it a juicy target for fraudsters. Data published in Pindrop’s 2017 Call Center Fraud Report today shows that these criminals are having more than their share of success.
In 2016, one in every 937 calls was fraudulent, a significant increase from 2015, when one in every 2,000 calls was fraudulent. The data, extracted from more than 500 million calls to Pindrop’s customers’ call centers, is an indication that the fraudsters running these phone scams are getting better and better and continuing to develop new skills and schemes to get past call center agents.
“The sophistication of the fraudsters, the expansion of criminal rings, heightened security in other channels, and the amount of information available on the dark web is making the call center the easiest fraud target in virtually every industry,” said Vijay Balasubramaniyan, CEO and co-founder of Pindrop.
“We see these attacks first hand and we are able to help some of the biggest banks, insurance providers, and retail companies reduce fraud exposure and provide a better authentication experience for their valued customers.”
The fraudsters involved in these schemes tend to focus on the organizations with the highest potential return, and that typically means banks, card issuers, and other financial institutions. The fraud rate continues to rise for most of these industries, especially banking. From 2014 to 2016, the fraud rate in banks went from one in every 2,650 calls to one in every 867. Retailers also took a big hit in 2016, with the fraud rate rising to one in every 491 calls, up from one in every 1,000 calls.
As phone fraud tactics have evolved over the years, the organizations victimized in these scams have lost a significant amount of money. In 2016, enterprises lost $0.58 per call to phone fraud, and those losses add up quickly when the call volume for these organizations is taken into consideration.
The increased focus on call centers by fraudsters is the result of a number of factors coming together. Perhaps the largest contributor to this phenomenon is push by banks and other high-value targets to secure their online operations. Attackers are facing many more hurdles when going after online or mobile banking than they did just a couple of years ago, and the same holds true for in-person transactions. The introduction of EMV cards in the United States has made in-person fraud much more difficult, which leaves the phone channel as the most attractive choice for criminals.