Smartnumbers’ counter-fraud community convened this summer, united in a desire to share insight and find smarter ways to stop fraudsters from targeting their customers via contact centres. Smartnumbers’ chief product and success officer, Tim Burton, summarises the key parts of the discussion.
Recent analysis of Smartnumbers data indicates a 20 per cent increase in contact centre fraud compared to the previous year, in contrast to the 4 per cent reduction in overall fraud reported by UK Finance. We explored these findings with Smartnumbers customers – users of the Smartnumbers platform – and considered how to use this insight to enable optimal fraud prevention approaches.
We discussed the volume of suspicious calls being flagged and the types of activity being carried out. Analysis of calls into our customers’ contact centres shows that one in 400 calls now show signs of fraudulent activity, up from one in 500 last year. And this is despite an overall reduction – around 3 per cent – in contact centre traffic for our customers.
This shift in numbers was somewhat anticipated in the UK, with the introduction of strong customer authentication (SCA) regulation and the enhanced security that comes with the Financial Conduct Authority’s revised payment services directive (PSD2) making digital channels harder to hack. As a result, we see fraudsters turning to telephony as the weak spot in remote channels.
Understanding Fraudster Tactics
So what are fraudsters trying to do? Earlier this year we enhanced the Smartnumbers platform with updates to our consortium features. These included:
- Enabling the creation of fraudster profiles – the ability to combine real time intelligence on individual criminals from multiple customers
- Inclusion of fraud method data – the ability to categorise the type of attack in line with UK finance definitions
These features have given Smartnumbers the ability to drill down into the ‘intent’ behind the attacks from criminals, which over time enables increasingly stronger predictive recommendations on treatment strategies.
Here’s what we have discovered so far. The top fraudulent activity we see, at 62 per cent of all flagged calls, are Account Takeover (ATO) attempts. And diving deeper, we see that 27 per cent of these ATO attempts are related to criminals trying to enrol their voices for voice biometric authentication. Despite industry-wide low enrolment rates for voice biometrics, fraudsters are pursuing this method, driven by the need for account control to perform high risk transactions.
The next most common activity we see is IVR reconnaissance: this accounts for a further 27 per cent of fraudulent activity flagged by Smartnumbers users. Here fraudsters are targeting the IVR (seeing how far along the customer security checks they can get) to validate data collected from other sources or enrich incomplete data. This trend is concerning, especially as market dynamics push for higher use of IVR systems in contact centres, because introducing further layers of security here is challenging as it negatively impacts customer experience. It’s also worth noting the security risks of bot-to-bot interactions here, as usage of bots increases – both by fraudsters and contact centres.
Finally, we’re seeing a significant number of callers withholding numbers and disconnecting within the IVR, avoiding agent interaction. We believe a significant number of these calls are carried out by individuals operating as a ‘money mule’ – a person who lets criminals use their account to move money – sending or receiving funds on behalf of a criminal. Our initial findings suggest that fraudsters use this method to confirm cleared funds and check for account blocks. This emerging trend warrants further investigation and discussion.
Enhancing Collaboration and Defence
So what now? We need to keep talking. Improving collaboration across the telephony ecosystem is essential. Nearly half of known criminals target multiple consortium members, yet most current ‘kill chain’ strategies are isolated. There’s a need for better data integration and collaboration across banks and other sectors, incorporating technology partners, social platforms and telco providers to identify and combat fraud effectively.
We also need to work together in the arms race for automation, to establish trust in voice interactions as conversational AI evolves and to understand how to leverage telephony data to combat money mules. And we need to continue to meet regularly not only to discuss current issues but also those coming in the very near future.Join our community at Smartnumbers to stay updated on the latest trends in contact centre fraud. Receive the newest insights and resources directly by signing up here:
