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The State of Phone Fraud

Fraud-Report-SqBannerToday, Pindrop Labs released their latest Phone Fraud Report. In the report, we examined several million calls to understand fraud tactics, frequency of attacks, and potential consequences of fraud.

This year, for the first time, we dug deeper into the many ways phone fraud affects different industries. From the amount of fraud calls, to the potential fraud losses, there are big differences the way phone channel security affects banks, brokerages, credit card issuers, and retailers. For example, across all industries, 1 in 2,200 calls is fraudulent. But for credit card issuers, that rate jumps to 1 fraud call in every 900 calls.

We also looked at how phone fraud is affecting consumers directly. We found that 1 in 6 phone numbers calling the average American is a robocaller. On a larger scale, we found more than 86.2 million scam calls go out every month. It will be interesting to see how to FCC’s latest rulings on robocalls affect these numbers next year.

Here are some of the key findings from our report:

Phone fraud crosses international borders, enterprises, and industries

  • Across financial and retail institutions, 1 in every 2,200 calls is fraud, an increase of more than 30 percent since 2013.
  • Rates of phone fraud are similar across economically developed countries, regardless of security regulations and legislation in place.
  • Phone channel assailants use multi-pronged attacks, targeting consumers, retailers, and financial institutions simultaneously.

Phone fraud poses a significant fiscal risk to financial institutions

  • Credit card issuers face the highest rate of fraud calls, with 1 fraud call per every 900 calls.
  • On average, financial institutions risk exposing an average of $7-15 million to phone fraud per institution.
  • When attackers are able to pass knowledge-based authentication (e.g., personal security questions), financial institutions risk major monetary losses, as well as regulatory compliance and privacy issues.

Attackers are using robodialers to increase efficiency in targeting consumers

  • 1 in 6 phone numbers calling a consumer is a robocaller.
  • 5 percent of U.S. phones receive at least one robocall every week.
  • More than 86.2 million calls per month in the U.S. are phone scams.

To read the full report, click here.

Click here to view the infographic.

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