The shift to digital banking delivers convenience to customers and opportunities for fraud operators.
Due to the onset of COVID-19, with many areas requiring social distancing and many branches closing, Americans became very acquainted with the digital banking channels, especially mobile. While convenient for consumers, it also presented another opportunity for scammers.
The FBI acknowledged the uptick in usage in a recent public service announcement, reporting a 50% surge in U.S. mobile banking in 2020 so far. The PSA also cautioned, “The FBI expects cyber actors to attempt to exploit new mobile banking customers using a variety of techniques.” One of those exploits involves mobile deposit fraud.
At the same time, the almost 160 million stimulus checks put in circulation through mid-June also presents an inviting target. Advanced Fraud Solutions, which provides deposit fraud detection software, has processed about a million Treasury items on behalf of banks and credit unions compared to some 370,000 items over a similar period in 2019. Troublingly, AFS identified 41,000 of those million items as fraudulent in its Treasury validation system.
Stimulus checks are just the latest opportunity for cybercriminals, who take advantage of any cracks in the system—including newer channels like mobile deposits—or any emergency or disaster situations. The IRS even described stimulus payment scams as “aggressive and evolving.”
While there are many ways cybercriminals use remote deposit capture scams, one of the most common deceptions involves identity theft. This either encompasses hackers stealing account holders’ personally identifiable information or account information—or duping them into providing it through social engineering.
In April, the IRS warned Americans to guard against a dozen scams particularly prevalent in 2020 seeking stimulus checks and economic impact payments. The “dirty dozen” scams included phishing using fake emails, letters, text and links; impersonator calls; and stimulus/refund theft where criminals try to file a fraudulent application using stolen IDs to swipe payments.
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Advanced Fraud Solutions, High Point, North Carolina, has been a trusted leader in providing fraud mitigation tools for banks and credit unions nationwide for over a decade. In 2007, a group of regional financial institutions in North Carolina, seeking a way to share counterfeit check information between one another, established the premise of Advanced Fraud Solutions. This idea of banks and credit unions contributing bad check data to work together in the fight against fraud was born and has grown exponentially over the years. Today, we have over 650 financial institutions nationwide utilizing a wide variety of fraud prevention tools, yet still subscribing to the idea that sharing high-risk information is the best approach to fighting fraud.