Fraud is constantly evolving. From one year to the next – even from one day to the next – fraudsters change their tactics in an attempt to steal hard-earned money of innocents.
Many times they deceive victims into thinking the interaction is legitimate and other times they prey on the unknowing to swindle and defraud. In either case, the fraudsters employ very believable techniques that make them difficult to detect and prevent.
Unfortunately, it’s working.
According to the Federal Trade Commission, consumers lost nearly $8.8 billion to scams in 2022, representing a 30 percent increase from the previous year. Investment scams accounted for more than 40 percent of losses last year, at $3.8 billion. The second highest reported loss amount came from imposter scams, with losses of $2.6 billion.
“At Regions Bank, we’re committed to protecting our customers,” said Jeff Taylor, head of Commercial Fraud Forensics at Regions Bank. “There’s no better way to do that than to educate our customers about the latest risks.”
Here are three scams to look out for in 2023:
Authorized Push Payment Fraud (APP)
- How it works – APP has often been considered to only include payment transactions originated by consumers in one of the person-to-person payment channels. However, many industry experts now consider Business Email Compromise (BEC) to fall in this same category. In most APP fraud events, the fraudster has convinced the legitimate party to initiate a payment transaction using their user credentials. While normally starting out with phishing or smishing tactic, the fraud is validated through email or text between the fraudster and the customer. Or hacked employee email accounts may instruct the customer to create a payment, change the account information on the payment or to redirect a payroll deposit. But the end result funnels the money into an account controlled by the fraudster. Unfortunately, this technique is highly effective and, according to ic3.gov, has resulted in over $42 billion dollars in losses for legitimate businesses.
- Keep in mind – The same threat exists for consumers and individuals. Fraudsters may send a message asking for a donation to a charity or for help escaping a dire situation. They may ask for payment in gift cards or over one of the faster payment transaction platforms. These scams may also take on the characteristics of a romance scam, or an investment scam promising returns that are too good to be Be wary of a sudden influx of spam emails. Fraudsters use this method to obfuscate important security notifications once they have taken over the victim’s email.
- What you should do – We suggest that upon receipt of a request like this, follow the STOP-CALL-CONFIRM method to validate the request. STOP your process; pick up the phone and CALL the requestor at a known number (don’t call the number in the email or respond to the email or text); and CONFIRM that the request is legitimate. Also, train your staff to recognize phishing attempts and create a culture of fraud awareness.
- How it works – You receive an email from a well-known company, looking for someone with your credentials to fill a senior position. The email contains a link to access if you are interested. When you click on the link, it takes you to a legitimate looking document that asks for your resume or to fill out an application. It all sounds legit so far, right? But wait. The document you filled out was actually a well-crafted fake and was used to capture your personal information. That information will likely be used by the fraudster to perpetrate an identity theft fraud, using your information to apply for credit cards, a car loan, a checking account, etc. The scam may also include a request for your banking account information, presumably for direct deposit. The fraudster may ask for funds to pay for your laptop and phone; promising a reimbursement as soon as you receive the order. They may also ask you to accept and deposit a check sent to you with the understanding that you will wire an amount to an account provided to you. You don’t need to open up a bank account for a new job, or give fraudsters the opportunity to lauder illicit funds.
- Be aware – These scams are often circulated over social media platforms and seek to defraud job seekers and work from home applicants. The best way to avoid these scams is to verify the company and position through the company website before applying. Don’t provide your banking information until you are certain the company and position are legitimate.
Imposter or Impersonation Scams
- How it works – One of the latest tactics employed by fraudsters is to spoof or impersonate the email or phone number of a trusted partner – like your bank or other financial services provider. The call appears to be originating from the trusted provider, and the caller ID may even match. The contact may start with a text message or voicemail indicating a problem with your account. They may refer to a debit or credit card transaction or a deposit that appears to be fraudulent. Once you click on the link or call the number, they begin asking a series of probing questions and may ask for your username and password. Do not, under any circumstances, provide this information to someone else
- Remember this – They may also ask you to enter a series of numbers into your cell phone preceded by ** (star, star). This step enables call forwarding on your phone, redirecting your calls to a device controlled by the fraudster. For example, a legitimate call from your bank to confirm a transaction would then go to the scammer, instead … leading to the creation of fraudulent payments from your accounts.
“Being fraud aware may not completely eliminate your risk of becoming a victim, but education and awareness are an important first step,” Taylor said. “Adding the STOP-CALL-CONFIRM process to verify payments can definitely help.”
The information presented is general in nature and should not be considered, legal, accounting or tax advice. Regions reminds its customers that they should be vigilant about fraud and security and that they are responsible for taking action to protect their computer systems. Fraud prevention requires a continuous review of your policies and practices, as the threat evolves daily. There is no guarantee that all fraudulent transactions will be prevented or that related financial losses will not occur. Visit regions.com/STOPFRAUD or speak with your Banker for further information on how you can help prevent fraud.