Phone fraud, vishing, and other forms of financial fraud have emerged as serious threats to many financial institutions and their customers. Banks and government agencies have begun forming alliances to help address the issue, and the latest is a new task force in the U.K., comprising banks, law enforcement, and government agencies, that will help quantify the threat and look for ways to help victims change their behavior to avoid being targeted again.
The Joint Fraud Taskforce is made up of a number of law enforcement agencies, including the City of London Police, National Crime Agency, and Financial Fraud Action UK, as well as the Bank of England, and CEOs from several other large U.K. banks. The aim of the new body will be to try and remove some of the vulnerabilities and weaknesses in the financial system that are targeted by fraudsters, as well as help coordinate response to fraud campaigns among affected institutions and law enforcement agencies.
Like information security, fraud is a complex problem with a lot of moving pieces and many different parties involved. While individual victims often are the ones that ultimately lose money, many fraud campaigns also involve attacks on banks or insurance companies. Addressing the larger issue involves addressing each of those individual problems.
“Fraud shames our financial system. It undermines the credibility of the economy, ruins businesses and causes untold distress to people of all walks of life. Some of you will know first-hand the financial and emotional impact of being defrauded, and the industry leaders in the room will know the true financial cost of fraud to their businesses, from reimbursing consumers to repairing your reputations with affected clients. But for too long, there has been too little understanding of the problem and too great a reluctance to take steps to tackle it,” U.K. Home Secretary Theresa May said in a speech announcing the task force.
“Fraud shames our financial system.”
May said there were 5.1 million instances of financial fraud in the U.K. last year, and much of the problem is due to phone fraud of one kind or another. These fraud campaigns often involve scammers calling individual customers, or sometimes businesses, and telling them there’s a problem with their account and they need to transfer money to another account immediately. In one recent instance, a business in the U.K. was conned into handing $1.5 million to scammers. One of the key issues the U.K. task force plans to address is caller ID spoofing and the technique that scammers use to stay on the line after victims think they have ended a call.
The task force also will work with banks to trace where stolen money goes after a successful fraud incident.
“We must concentrate efforts to improve our collective response on fraud. This means focusing on targeting high harm nominals and improving fast-track intelligence sharing between banks and law enforcement. It is only by systematically sharing information and data between banks and law enforcement investigators that we will be able to identify suspicious financial flows, track fraudulent funds through the system, and prove fraudsters are profiting from such illegal activity to support convictions,” May said.
Image from Flickr stream of David Heckman.