If you have attended one, or fortunate to attend all of the CFCA educational events last year, you will have certainly noticed some new attendees, new member industry representations, new fraud topics, and new panel discussions.
The representation at these events from financial services organizations has gone from strength to strength with more financial service organizations looking to collaborate on what is a very persistent and important issue for telecoms service providers, financial services organizations, and of course the consumer.
In the last few months the likes of Mastercard, PNC, and Bank of America, have joined CFCA as members, with others including Capital One, AMEX, TD Bank, Wells Fargo, and US Bank contributing to panel discussions and speaking at various educational events in 2023. As well as these individuals and financial institutions, businesses providing complementary technology and services to identify and manage fraud and scams have also joined CFCA, with new sponsors in 2024 reflecting the convergence of fraud-fighting in the financial services and telco sectors including Mitek, Experian Kount, Hiya, Transunion, and Caller ID Verification.
In the Global Fraud Loss Survey report published late last year, CFCA highlighted fraud evolution and the frauds impacting CSP’s and the financial sector, with the major growing fraud threat in the financial industry being scams, this is where consumers are targeted by fraudsters directly and persuaded or manipulated into processing a financial transaction. Telecom services are influential in the fraud process and are actively being targeted by the same criminals to facilitate these attacks. As such telecoms organizations are seeing attacks of differing nature increase across their environment. These attacks are not always revenue-impacting for the telco (but can be consumer or brand-impacting) as the purpose of the attack is to facilitate financial fraud. Issues such as Spoofing, Smishing, Phishing, and unauthorized account access are all facilitators of Scams frauds. If you add to this increased account takeover for OTP interception and Subscription fraud for account mules, you can see how telecoms and banking scams are intertwined causing major impacts for all parties.
The Federal Trade Commission stated $330m in consumer losses to Text/SMS scams in 2022 alone, with 2023 figures yet to be stated, but stating that 17% of fraud reports filed in the first two quarters of 2023 involved smishing. Scams have become more prevalent over the past few years, peaking during COVID and continuing to be a troublesome thorn in the side of CSP’s, financial institutions, and consumers. All the scams vary in complexity, modus operandi with different themes taking the opportunity to exploit a topical issue or concern and abuse the trust of the individual. All have the same goal, to get access to your bank account or savings accounts and siphon of money. To do this requires a number of pieces of information to then undertake a sim swap from the victims’ communication service provider and divert authentication requests from banking apps and websites enabling the fraudster to move the victims’ money.
To detect, manage, alert, and dissuade such nefarious behaviour, parties involved in these fraudulent attacks need to work together, CSP’s, and financial organizations need to collaborate and look to fight these frauds together, making it harder, more challenging, and painful for fraudsters to look to scam innocent victims. CFCA has filled a gap between CSP’s and financial organization in discussing and tackling the important and persistent thorny issue of fraud and scams. With organiszations working together, sharing best practices, discussing experiences, reviewing current threats, analyzing lessons learned, and evangelizing possible solutions means that these companies will be one step ahead of the fraudster.
CFCA in 2023 has taken a first step to instigate getting domain experts, and industry leaders from these different consumer industries together under a forum of intelligence to listen, learn, and liaise together under the auspices of trust, respect, and professionalism. In 2024 CFCA predict more representatives from the financial services will either join, attend, or contribute at future educational events to support and grow this important collaborative initiative, with one mutually agreed objective to stop fraud.