Call Center Security: What are the risks for credit unions?

Fraud and identity theft are old crimes, but the integration of digital means of sharing information makes the statistics of identity theft much easier to track. According to a new report from the U.S. Department of Justice, 7% of households reported some type of identity fraud in 2013. Identity fraud occurs across all subsets of the American population, with a slightly higher incidence for those with reported household incomes above $75k. Financial institutions have invested in creating and maintaining solid security foundations at every front. Criminals meet this tight security by evolving their methods, and call centers are a popular target for obtaininfraud-preventiong personal information.

 

It’s not just a technical problem

While larger banks have the resources to implement better call center security methods, smaller institutions, including credit unions, are left increasingly vulnerable in part due to their commitment to more personable, friendly member service. Though the Internet may seem like a likely source to gather information needed to commit fraud, sensitive information is often garnered by telephone. Organized criminals have methods to extract information from member service representatives. According to the Credit Union Times, such tactics include placing multiple calls “netting one piece of information on this call, another on that call, until… they have… all the information they need to empty a large account’. How large? The U.S. Department of Justice survey found over $20 billion dollars attributed to identity theft in 2013 alone.

Employee fraud is a risk

It’s a well known fact that employees pose fraud risks, but the reasons they choose to do so are harder to predict. While your credit union may do a phenomenal job at weeding out potentially risky new hires, trusted employees can be equally dangerous with the right information. According to risk management experts Shirley Inscoe and B.C. Krishna, the risk of employee fraud is dependent on diverse and difficult to predict factors. The current economic climate, the slow pursuit of white collar crime, or bribery by larger crime rings can turn a previously trustworthy employee. This problem is easily combated by following best practices for periodic employee review to watch out for warning signs.

Kindness can kill you

Friendly service is an integral part of credit union culture and a key marketing feature for many consumers. Member service representatives are taught to be as friendly and helpful as possible, but lack fraud prevention training to help them spot potential scammers. Sounding suspicious on the other end does not help maintain member relations. Smaller credit unions need to take a few plays from bigger institutions to help combat fraud. Investing in risk awareness training for employees that finds a balance between member service and consumer information protection is a necessity.

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Smart strategies for combatting risk

Asking for multiple forms of identification such as providing a paper document, entering in a number, and utilizing voice recognition software is a smart solution to combating fraud. Members are willing to provide additional documentation in order to prevent identity fraud.

Using a multifactor system for member identification or some sort of automated system that takes some of the decision making out of employees’ hands is only half the battle.

The other half is training employees to be both friendly and wary when warning signs arise.  If a member wants to change address, replace a card, and reset passwords at the same time, for instance, a few red flags ought to be raised.  Here at Robert C. Davis and Associates, our goal is to train your employees both to foster an environment that incentivizes their cooperation, preventing the risk of employee fraud, as well as to train them with hands-on methods that leave them prepared to deal with organized criminals. Changing technology is important in the fast-paced world we live in today, but improving the member contact at the root of much of today’s fraud can protect your credit union from fraudulent criminals.

Was this blog helpful? Send me a note with your thoughts on the issue of call center security at bob@robertcdavis.com.