Unprecedented financial pressures create massive opportunities for bad actors—external actors and insider fraudsters alike—to misrepresent for personal financial gain or steal from taxpayers, businesses and governments.
Already, numerous stories of fraud related to government stimulus and lending programs have been reported. Several Paycheck Protection Program applicants have exploited the good intentions of this government program designed to help keep American taxpayers on the payroll and families fed. Meanwhile, reports of stolen stimulus checks, fraudulent unemployment applications and possible abuse of other relief programs are becoming more common.
And fraudulent actors have not stopped at exploiting government programs. We’re seeing significant increases in attempts to retrieve sensitive personal data through phishing emails, too-good-to-be-true investment scams and fraudulent bank account openings. In fact, we’ve only seen the beginning of a new battleground of threats and scams exacerbated by the current conditions.
These fraud incidents affect areas that many financial institutions (FIs) do not traditionally include in their anti-fraud programs. For example, losses related to misrepresentations are often found in credit losses or overdrafts, and the liability for scams in those areas is often put back on the victim. This new fight is taking place all around us in increasing fashion.
As a result, FIs should adjust to this new battleground—and do so quickly. This includes making sure that both employees and customers are well-informed of emerging and evolving threats, implementing cyber and access controls for an increasingly remote workforce and tuning payment controls needed to help prevent and detect unauthorized disbursements of funds. In addition to shoring up existing controls, the current crises provide FIs with opportunities to rethink traditional fraud management approaches and innovate new ways to help protect their customers.