Visa shares how to keep fraud from hurting your business

There have been more than 200,000 complaints of scams and fraud filed this year, according to a New York Times report. Data from the Federal Trade Commission reveals Americans have lost more than $145 million to fraud related to the coronavirus, with schemes peaking in the spring when consumers received stimulus checks and other forms of financial relief.

The data was compiled by the commission's Consumer Sentinel Network, which provides law enforcement agencies and the public with information about rampant forms of fraud. The network has trackedabout 206,000 reports of fraud, identity theft, spam telephone calls and other potential scams related to COVID-19 that were submitted to the F.T.C. from Jan. 1 through Sept. 22.

"The biggest challenges for financial institutions and merchants when it comes to fraud is that it happens fast and furiously," Mike Lemberger, senior vice president and regional risk officer for Visa, North America, told ATM Marketplace in a phone interview. "Fraudsters want more data and they are continually searching for ways to get that information faster. As people share their data [such as in an app] they do so often without thinking, and their data can be stolen or compromised before they even realize it."

Lemberger works on the Visa Payment Fraud Disruption program which monitors merchants and banks in real-time for fraud and investigates if anything looks suspicious.

"We help our financial institutions and app creators by monitoring the platform. We also publish a lot of documents and best practices and we love it when people actually use our information. We recently put out a publication on how to buy online and pickup in the store which was becoming a big problem for merchant. When COVID-19 accelerated, a lot of people were driving up to big box electronic stores and yelling out confirmation numbers to store personnel to pick up computers and electronics. People were scared to get out of their cars, but basically anyone watching could have figured out that system wasn't secure," he said.

"You can yell out any number and take the merchandise before anyone realizes it has been stolen. When we realized fraud levels in pickups at the stores were going through the roof, we worked with merchants to come up with a better plan for customers to pick up their merchandise. That's how the Visa Payment Disruption program works. When we see a spike in fraud, we act upon it and try to get ahead of it so fraudsters don't get the opportunity to cash out."

Here is further insight from Lemberger's interview with ATM Marketplace.

Q: You talk about fraudsters cashing out. How do they do it?

A: What you find is as technology grows and people digitize, consumers expect instant access through apps. Everything is digital and to provide instant access, you are turning over your information every time to potential fraud. This is when fraud can occur. Apps give you instant credentials and you can pay for something immediately and open up an account in a digital format. You can pay for food, rides, merchandise and transfer money all through an app. If a fraudster gains access to your data, they can use your account for fraudulent purchases or to gain access to cash. People don't realize how important it is to understand how the app is handling your data to avoid a data breach.

Q: How do criminals avoid detection?

A: The key to avoiding detection as a fraudster is speed and organization. A fraudster knows that in striking, it's a volume game. The higher the volume, the more they can grab and the more they can grab, the more they can sell. It's about being quick and organized so they can attack an entire network before they are detected. And most people don't realize fraudsters are very organized. They act fast and move on quickly.

Q: What are tactics to help avoid fraudsters attacking?

A: Keep data encrypted and secure. Remember it may be a lot of work to monitor for fraud, but it's worth the effort. Fraudsters are getting more and more sophisticated and malware is playing a bigger role in collecting data. You want to be sure that any company handling your data is cyber secure.

Q: What is the most common mistake companies make in regard to fraud?

A: They don't pay attention to spikes or patterns in purchasing. They don't understand how quickly and easily fraud can occur. Recently, we saw a big shift in card-not-present purchases. We jumped on it immediately but if a company sees a spike in one area, the [fraudulent] buying online can happen quickly and they need to immediately pay attention to that spike and act accordingly. And working with an experienced company in fraudulent activity, like our team, is important in order to keep customers safe and secure. As a B2B company the security of our platforms and the dedication we provide is instrumental in keeping our customers safe and disrupting fraud when it occurs.

To read part one of this article, clickhere